An African grocery carries what West and East African families cook with and can't find nearby: frozen tilapia and croaker, goat, garri, fufu flour and rice, red palm oil, yams and plantains, seasonings and snacks, and malt drinks. Many also sell hair and beauty products, which keep without refrigeration and keep more of each dollar than the staples. The plan turns on the freezers, which hold the fish and meat, on stock that comes by freight from importers in Houston, Atlanta and New York, so running out means a week's wait, and on a small space carrying many kinds of product. The plan below works in departments per $100 of sales. In the example, a Brooklyn Park African grocery starts with $135,400, ends its first year about $567 behind before the owner's pay while sales build, and makes about $4,500 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the store in a paragraph: the communities, the regions it cooks for, what's missing nearby, the goals.
- Cost a few items: importer price, the card fee, the shelf price.
- Plan sales by department per $100: frozen fish and meat, staples, spices, produce, beauty, drinks.
- Freezers hold the fish and meat: budget for them and their power.
- Stock comes by freight a week away: reorder before it runs out.
- Beauty products keep the most of each dollar and need no cold space.
- TaroStack puts stock on a reorder list in days of cover. More below.
Part 1: the business description
Baobab African Market, a made-up African grocery in Brooklyn Park, Minnesota, writes:
Baobab African Market is a 2,500-square-foot African grocery in Brooklyn Park serving Liberian, Nigerian, Ghanaian and East African families, with chest freezers of fish and goat, staples by the bag, spices and snacks, yams and plantains, hair and beauty products, and drinks. In its first year it aims to reach $65,000 of sales a month.
Part 2: what an item costs
| Item | Cost | Card fee | Total cost | Price | Cost share |
|---|---|---|---|---|---|
| Frozen whole tilapia, per lb | $2.30 | $0.10 | $2.40 | $3.99 | 60.2% |
| Garri, 4 lb bag | $6.20 | $0.25 | $6.45 | $9.99 | 64.6% |
| Red palm oil, 1 liter | $5.00 | $0.20 | $5.20 | $7.99 | 65.1% |
| Puna yam, each | $7.20 | $0.30 | $7.50 | $11.99 | 62.6% |
| Braiding hair, pack | $2.80 | $0.15 | $2.95 | $5.99 | 49.2% |
The importer's price includes freight to Minnesota, which is why staples keep less here than in a store near a port. The department costs in Part 4 run higher than these items, because they carry yams that spoil, freezer burn and damaged bags. How margins differ by department is in grocery store profit margins by department.
Part 3: suppliers, the freezers and reordering
Staples, frozen fish and beauty products come by freight from importers in Houston, Atlanta and New York, a week from order to shelf, so the owner reorders on a weekly day. Buying from U.S. importers means they handle FDA's import rules, in fsvp requirements. Frozen fish is checked on arrival and kept at 0°F. Yams and plantains come from a produce wholesaler twice a week, and the yams that soften are marked down before they spoil.
Part 4: what each category earns
| Category | Sales | Variable cost | Contribution | Margin | Hundreds a month at full speed |
|---|---|---|---|---|---|
| Frozen fish and meat | $100.00 | $68.00 | $32.00 | 32% | 150 |
| Staples: rice, garri, flours, palm oil | $100.00 | $72.00 | $28.00 | 28% | 200 |
| Spices, seasonings and snacks | $100.00 | $60.00 | $40.00 | 40% | 80 |
| Produce: yams, plantains, peppers | $100.00 | $64.00 | $36.00 | 36% | 70 |
| Hair and beauty products | $100.00 | $55.00 | $45.00 | 45% | 100 |
| Drinks | $100.00 | $68.00 | $32.00 | 32% | 50 |
At full speed the business sells $65,000 a month and keeps $22,220, 34.2%; staples bring $5,600 of it.
Part 5: the first year, month by month
Fixed costs are $17,700 every month: rent ($4,200), wages ($9,800), utilities, mostly the freezers ($2,000), insurance ($400), equipment upkeep ($300), register and software ($200), ads ($200), and other costs ($600). Sales start at half of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $32,500 | −$6,590 | −$6,590 |
| 2 | $36,400 | −$5,256 | −$11,846 |
| 3 | $40,300 | −$3,922 | −$15,768 |
| 4 | $44,200 | −$2,592 | −$18,360 |
| 5 | $48,100 | −$1,258 | −$19,618 |
| 6 | $52,000 | $76 | −$19,542 |
| 7 | $55,400 | $1,237 | −$18,305 |
| 8 | $57,900 | $2,089 | −$16,216 |
| 9 | $60,500 | $2,977 | −$13,239 |
| 10 | $62,400 | $3,632 | −$9,607 |
| 11 | $65,000 | $4,520 | −$5,087 |
| 12 | $65,000 | $4,520 | −$567 |
The year's sales are $619,700, and the business ends it $567 behind, before the owner's pay. It breaks even at about $51,780 of sales a month, in the sixth month. The lowest cash point, −$19,618 in month 5, is covered by the $28,000 of working cash with about $8,400 to spare. Christmas, Independence Day celebrations and graduation season bring the busiest weeks; with stock a week away by freight, order for them two or three weeks ahead.
Part 6: the startup budget
| Item | Example |
|---|---|
| Opening inventory | $45,000 |
| Build-out | $20,000 |
| Chest and upright freezers | $18,000 |
| Lease deposit and first month | $8,400 |
| Shelving | $8,000 |
| Register | $3,000 |
| Signs | $3,000 |
| Licenses and permits | $2,000 |
| Working cash | $28,000 |
| Total to start | $135,400 |
The $107,400 before working cash is earned back in about two years at full speed. A general small grocery is in small grocery store business plan, and a halal butcher and grocery in halal meat shop business plan.
Get the template
Download the African grocery store business plan workbook. Four sheets: your categories, each per $100 of sales with its variable cost and hundreds a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month, the lowest cash point and whether the working cash covers it; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan uses one reorder day. A truck from Houston runs late, the garri sells out in four days instead of seven, and the freezer of croaker is half empty before anyone notices.
How TaroStack does it
TaroStack puts every item on a reorder list in days of cover, keeps dates on the frozen fish, and records shrink by reason.
Reordering in days of cover. Each item shows how many days it will last, worked out from how fast it sells, so the garri is reordered before a week-long freight wait runs it out.
Dates on the freezer. Frozen fish and meat keep their dates, the oldest goes first, and an alert comes before a date runs out.
Shrink with a reason. Soft yams, freezer burn and damaged bags are recorded with their reason, reported by item.
| The job | Notebook | In TaroStack |
|---|---|---|
| What to reorder this week | A walk down the aisles | Days of cover |
| Fish near its date | Found in the freezer | An alert before the date |
| What spoiled | Not counted | Losses by reason |
Reordering, lots, expiry and losses by reason are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.