People drink alcohol in good times and bad, so opening a liquor store is a great way to make sure you have a steady income.That inflexibility in demand contributes to low profit margins, meaning you're unlikely to get rich with just one store.It can be difficult for a business person to know where to start when it comes to retail alcohol sales.With proper counsel and wise strategies, your store can be a reliable income source for years to come.
Step 1: You can find a location.
The profit margins on liquor stores are low and demand iselastic, meaning that it doesn't change much over time.Your liquor store's success is tied to its location.If you open a store in a saturated market, you're more likely to eat into the local competitor's bottom line than you are to do well.Neighborhood stores have liquor stores.What sells in one neighborhood won't sell in another.As you scout locations, keep this in mind.There are other factors that affect market saturation.The demographic and cultural makeup of the neighborhood is an influential factor.
Step 2: Get a lawyer.
You need to make sure you can actually operate a liquor store there once you've identified what seems to be a suitable location.It isn't always easy to be sure you're following the law when it comes to where alcohol can be sold.If you want to get a license for the retail sale of alcohol and spirits, the best advice is to hire an attorney familiar with the local laws and let them guide you through the process.There is a hard cap on the number of liquor stores.You have to buy a liquor license from someone who already has one in order to pay the high price.You can get a license for a few hundred dollars if you have a hard cap.Licensing is just the beginning.Some countries don't allow beer and wine to be sold with spirits.Some people don't allow liquor sales at all.Local assistance is important because counties and municipalities place additional restrictions on alcohol sales.Running afoul of local regulations is expensive.If you want to get the licensing right, pay a fine, and then pay an attorney, then you should.
Step 3: It's a good idea to research the market.
When you know you'll be able to sell alcohol at your chosen location, you need to start crafting a business plan.The first thing you should do is research the market around your location.Neighborhood stores have liquor stores.What sells in one neighborhood won't sell in another.The demographic and cultural makeup of the neighborhood is an influential factor.Your cost estimates can be more detailed if you include the market analysis in your business plan.Ethnicity, age, marital status, and income are all factors that influence drinking habits.
Step 4: Sales and cost projections should be made.
The market analysis can give you a good idea of your customer base.You can create sales and cost projections based on buying habits and price points for items in your area with an idea of the composition of your customer base.If you have a large amount of young single customers in your area, you can expect to sell a lot of alcohol.Ask the wholesale distributors about their case prices and compare them to popular brands.You can estimate costs and sales with traffic estimates and overhead.It's important to remember the impact of competitors on your sales.
Step 5: Financing is required if necessary.
As a rule of thumb, a new business owner should use as little financing as possible.This rule applies to liquor stores, but since demand for alcohol is more or less fixed, many lenders will regard a liquor store as an unusual safe investment.Bring your business plan and financial statements with you when you approach the lender.The market research and revenue projections are the most important parts of a business plan.Write a Business Plan for a Small Business has more information on how to write a good business plan.
Step 6: Register with the Alcohol and Tobacco Tax and Trade Bureau.
The Department of the Treasury regulates the taxation and trade of Alcohol and Tobacco.All retail sellers of alcohol have to register with the TTB.Alcohol retailers used to pay a special tax to the US Treasury.No longer.Keeping the registration accurate is the only requirement.The only information you'll need is the name and address of all the owners of the business, and the type of alcohol sales you will be engaging in.The form can be found at www.ttb.gov.
Step 7: Sell your inventory.
This will be your biggest expense.There are millions of inventory on the shelves of a well-stocked liquor store.You should resist the temptation to compete with that.The more you sell, the cheaper the cost to you, and then broaden your inventory later.The price of alcohol is usually fixed by a distributor who has a monopoly on that particular brand, so you're unlikely to be able to negotiate much on the price.One distributor will sell Jose Cuervo wholesale, and you'll only get volume discounts if you shop and compare.
Step 8: Consider hiring a worker.
Absentee owners aren't the types of businesses that most liquor stores are.In the beginning, the owners of liquor stores work full time.If you hire an employee or two, you might be able to operate more efficiently.
Step 9: Wine or mixology classes are held.
Consumers appreciate the nuances of a good drink recipe or learning about a small winery because they are more educated.Use the educated consumer to your advantage.If it is legal in your area, classes like these are a great way to keep consistent traffic inside the store.Even if you can't hold wine tastings or mixology classes on the premises, there are still ways to accomplish the same goal.
Step 10: Suggestions for food combinations.
As the sommeliers say, "what grows together, goes together." Suggesting food combinations to go along with beer, wine, and spirits can be a great way to cultivate an air of expertise, which will appeal to higher-end customers.You can sell fruit, cured meat, or cheese along with your beverages if you take this step further.Customers will pay for convenience.
Step 11: Your online presence can be boosted.
Encourage your customers to post online reviews by starting an email list and creating a high quality, professional website.Get active on social media and announce flash loss-leader specials, selling a product at a loss for a short amount of time to drive up traffic.If you can, boost your visibility and ingratiate yourself in the community.
Step 12: There are local events that you can sponsor.
You can ingratiate yourself in the community by sponsoring local events.It's an opportunity to boost sales and you can offer promotions to get people to come back to your store.
Step 13: Receive promotional items from distributors.
Most distributors keep you stocked with new displays.It will make your store look fresh if you keep it updated.
Step 14: The law is on the right side of the law.
Even if you make a mistake, selling to customers under the age of 18 can cost you thousands of dollars in fines.Ask your local law enforcement what you can do to make sure you don't get fooled by a fake ID.Liquor stores have been targets of criminal activity.The use of cash has led to a decline in convenience and liquor store robberies.