Opening a mini-mart or a mobile home park store is a great way to increase the value of your park. It’s also an eye-catching attraction for potential new tenants. And it can make the lives of your current tenants more convenient while turning a profit for you in the meantime.
You might be thinking: “I’m a mobile home park owner! Not a retailer. Where do I even begin?” Well, if you are a mobile home park owner, you are already a businessman. You have experience working with money, which is one of the main things that scare people off from tackling an opportunity like this.
As for the rest, that’s what where we come in.
What kind of business do you want to run?
The first decision you need to make is whether you want to start your own brand or whether you want to buy a franchise. Both options aren’t very different in terms of how much it will cost you to get off the ground, but they will differ in other ways.
If you go with the franchising option, they will take care of finding vendors, help you decide on what inventory to stock, provide you with all kinds of branding, and applying for permits and licenses. The downside is that you will need to pay a franchising fee on a regular basis and that you aren’t entirely your own boss.
Going it alone means that you need to take care of all those tasks yourself. However, it also means you will be taking all your profit and you will be in complete control.
Come up with a business plan
This is the one area where you might feel a little out of your depth in the beginning. After all, most of us have never come up with a business plan for a retail store before. To give you a headstart, here is a handy business plan template.
The easiest way to start is to look at examples and templates like this and to start crunching the numbers. Once you get going, it will become clearer to you how to proceed. A business plan should at the very least present the following information:
- Basic business information such as name, purpose, mission statement, etc
- Projected earnings
- When you plan to start operations
- Start-up costs
Because you are running a mobile home park store solely for your residents, it will make a lot of this guesswork easier. You only have limited ambitions and a target market to cater for. You also don’t need to come up with a serious marketing strategy.
On top of making things much simpler for you going forward, it will also help a lot if you need to apply for insurance, a loan, and permits down the line and will make people take you more seriously.
Make a list of everything you need and calculate start-up costs
How much it will cost you to get your convenience store up and running will depend entirely on your business. One thing that will have a major impact is how your mobile home park store will look.
If you have a vacant mobile home standing around, it won’t be too hard to flip it and turn it into a simple convenience store. This will cost you a minimal amount of money, save you plenty of time, and won’t break with the consistent look of your park. If you plan on constructing a new building for the store, it will cost you more.
The type of inventory you will stock makes up another big part of your start-up costs. The bigger your store and the more expensive items you stock, the higher your start-up costs will be but will also allow you to turn a higher profit down the road.
Also, make a list of all the other things you will need, such as shelves, fridges, cash registers, countertops, revolving displays, etc. Depending on your area, the trust you have in your tenants, and your personal views on security, you should also consider installing security cameras.
It’s very important that you do a lot of research and effort when calculating these costs and including them in your business plan. This will be the amount you need to secure financing for so it’s definitely a requirement.
Secure small business financing
Based on your start-up costs and your available funds, you may need to apply for financing. Nobody likes going through this process, but it might be the only way you can get the cash to get your business off the ground.
This list mentions different methods of financing and discusses each in-depth. We always recommend the tried-and-trusted traditional bank loan as the safest (and often cheapest) option. However, banks can be pretty picky and may leave you needing to look at alternative avenues.
Some of these are:
- Private lenders – Expect much higher rates and less consumer protection. The process is often much quicker and flexible regarding requirements.
- Line of credit – You don’t have credit for nothing. Hopefully, your business will make money at a rate that allows you to pay back your credit without any trouble.
- Crowdfunding – In this context, we mean that you should ask residents of your park whether they would like a small convenience store. If residents are enthusiastic enough, you might be able to collect some of the capital you need to get started.
- SBA loan – The U.S. Department of Small Business Administration hands out these loans to potential small business owners who have no means of obtaining financing otherwise according to certain criteria.
- Microloan – Unless you build a pretty big store from scratch, you shouldn’t need too much money to get started. These non-profit organizations have their own criteria and might be able to help you out with amounts under $50,000.
Choose which products you are going to stock
The products you stock are arguably the most important part of any retail business. You don’t want to disappoint your residents by exciting them over the new convenience store only to not provide any of the things they actually need.
It’s not the end of the world if you don’t get it 100% right from the very beginning. You can always change up your stock with time. But it will cost you more money and might leave you hampered with a heap of products you have no use for.
Since you know exactly where your target market is and can reach out to them directly, your job regarding this is already much easier than it could have been. You should definitely talk to your residents and find out what kind of items they wish they could get quickly and on short notice without making the drive out to town. This information must be your leading carrot on a stick when choosing products to stock.
Off the top of our heads, here are just some of the items you definitely won’t regret stocking:
- Snacks and sweets
- Cool drinks
- Basic fresh food supplies such as eggs, bread, milk, cheese, etc.
- Canned foods such as beans, jams, etc.
- Bathroom products such as soap, hand wash, toothbrushes, shampoo, etc.
- Sanitary products such as sanitary pads, etc.
- Basic baby items like diapers, wipes, formula, etc.
- Other useful items such as batteries, candles, lighters, matches, etc.
A simple and effective trick is to sit down and think about the stuff you usually run out of. What necessities end up causing you frustration as you find yourself driving to town to get them? Another safe bet is to visit one or two of the nearest gas stations and check out what they keep in their convenience stores as well as your local EZ Mart or 7-eleven.
You can always expand your merchandise later, but it’s safest to start with the surefire sellers.
There are a few other items that usually sell, but that need some extra consideration from your side. For example, cigarettes, lottery tickets, and alcohol. You need to carefully evaluate the general consensus among your park inhabitants and the kind of atmosphere you want to create. On top of that, you will need to apply for special permits to sell these items.
Remember that since you, the park management, own the store, it is also closely associated with you. It’s a different thing altogether what people buy outside and bring into the park by themselves.
Apply for all the necessary permits, licenses, and certificates
We know, we know. Applying for permits is no one’s favorite chore. The research, paperwork, and back and forth can go on for a while and can turn it into a very frustrating and tiring process.
However, it is very important that you complete this step with all the care in the world. It’s flat-out illegal to do business without the required permits, and you can receive hefty fines or even jail sentences for doing business illegally.
Lucky for you, we will provide you with a list of the permits you need so that you only have to worry about actually applying for them:
Federal Tax Identification Number or Employer Identification Number (EIN)
This number is used by the IRS to identify a business entity in order to do admin on their taxes. Most vendors and wholesalers will only do business with you if you have this number.
This is also one of the easiest application processes. You can do everything online right here. You might need to apply for another state-specific one, so check with your local authorities.
Business operation license
A basic business operating license is needed for any type of business. Every state, city or county has its own registry and its requirements. Most of them allow you to apply for this online. If your mobile home park is in Michigan, here is a guide for small business owners.
Usually, cities have their own business licenses, but if you live outside of city limits, you need to check with your county. You should also check with your local municipality, just to be safe. In a worst-case scenario, you might need to apply for a few different ones.
This certificate basically makes you exempt from sales tax as you will be selling the goods you purchase. This certificate isn’t available in all states and is named differently in different states. If it’s required in your state, vendors will also refuse your business without it.
Doing business as or fictitious name permit
Almost all businesses need to apply for this kind of permit. You only need to apply for this permit if your business doesn’t operate using your own name. Again, you should check your local state for individual requirements.
Speciality sales permits
This one is heavily dependent on your individual state. This permit basically entitles you to sell certain products that are dangerous or regarded as “vices,” such as:
- Lottery tickets
You should definitely contact your local authorities and find out if anything you plan to sell requires a special permit.
Certificate of occupancy
This permit is only needed if you are building a new building to use as a shop on the premises. Various safety officials will inspect the shop and you will be granted the permit if it’s deemed safe to use.
Home business license
If you plan to use your residence on the property as the shop, you might need to apply for this kind of license from your local authorities.It won’t be necessary if you use a separate building.
Small business tax-deduction
As a small business, you will be able to make numerous tax deductions based on many of your expenses. For example, a self-employment tax deduction, supplies, repairs, and insurance. Here is a list of 20 tax deductions you can apply for.
As an owner of a mobile home park and a store, we hope that you have a professional bookkeeper taking care of your affairs. Make sure that yours takes advantage of all the tax breaks you may be eligible for.
Make sure you don’t lose everything in case a disaster completely wipes out your store and your stock. Normal homeowners insurance doesn’t always cover business losses (if you opened the store in a mobile home). Whether or not you need extra coverage also depends on the actual insurance you have on the mobile home park itself. Consulting an insurance expert is a no-brainer to make sure you are covered for any eventuality.
You could always run the store yourself, but if you don’t have the money or energy to take on that full-time burden, hire some help. You can look for employees from your very own residents or from the outside. Just be aware of the fact that if your park is on the outskirts, it will be very hard finding anyone willing to make the commute.
You will also need to take care of extra steps such as employee taxes, keep up to date with wage laws, etc.
Improve your park and open a mobile home park store for your residents!
There will inevitably be many other challenges along the way as you open your very own mobile home park store. However, these are the most important things you should be cognizant of. We hope that this article will guide you in building an even better experience for your residents and put some extra money in your pocket. For more ideas on how to manage your mobile home park, head over to our previous article, here.