How to Open a Tobacco and Beer Store

Saturday, April 12, 2014

How to Open a Tobacco and Beer Store

An expansive, affordable inventory sets a tobacco and beer specialty retailer apart from a consumer's other options, such as convenience stores. Choosing an accessible location for your store is essential, as are unique products. Abiding by all state and local laws is also essential, so obtain a license to sell beer and tobacco products from your city government and ensure all employees meet established age requirements, which vary from state to state. In Kentucky as of this article's publication, workers of any age can sell tobacco products, but in Washington state, minors must be supervised by an adult employee when selling tobacco. Alcohol sales are similarly regulated.

Licensure and Planning

Step 1

Obtain a license to sell beer for off-site consumption from your state's department of alcoholic beverage control, or similar agency. Many states, such as Virginia, require stores that sale packaged liquor and beer to train their employees and file documented proof of that training with the state government.

Step 2

Obtain a license, if necessary, to sell tobacco products. Mississippi, for example, does not require any licensure to sell tobacco products. Acquire a business license from your city hall or chamber of commerce, then incorporate your retail store as a limited liability company to enjoy tax benefits.

Step 3

Write a business plan that details your concept for the store, how you will execute it and how the store will become profitable. Describe how you will finance your store, how many employees you will need and the type of inventory you will keep. A store devoted to beer and tobacco products needs a wide array of products that aren't available at other stores, so detail how you will source your inventory as well.

Step 4

Lease, build or buy a retail storefront in a high-traffic area, then focus on making your store accessible to consumers. If you are operating a small shop in an outdoor mall or similar venue, a window display will entice customers traveling by foot. Customers traveling in a vehicle will look for a specialty shop that has drive-up window service and ample parking.

Operations and Promotion

Step 1

Open an account with beer and tobacco wholesalers to schedule regular product delivery to your store. Whenever possible, use promotional materials such as posters and calendars to advertise the products you have for sale -- and to promote the store itself. Suppliers often market-test new products before releasing them to a wider audience. If you are given the opportunity, participate in these trials to provide your customers with a richer and deeper inventory selection.

Step 2

Advertise your products and offer discounts and specials to entice new customers, but ensure your advertising campaign follows all state and federal laws. Though the Federal Trade Commission regulates tobacco and alcohol advertising across the United States, individual states and municipalities might have further strictures. Consult your state's department of alcoholic beverage control or department of public health.

Step 3

Monitor consumer trends to determine which varieties of beer and tobacco are likely to sell well, then use that data to make inventory decisions. Consumers visit specialty retailers because they want to buy products, such as regional and small-batch beers, not carried in conventional stores.

Things Needed

Beer-sales license
Tobacco license
Beer and tobacco sales training program
Business license
Business plan
Retail storefront
Wholesaler contract
Promotional materials
Advertising plan

References (7)

Resources (3)

About the Author

Ben Taylor has been writing since 2005 and has had work published by WEKU-FM and West Virginia Public Broadcasting both on air and online. Taylor holds a Master of Arts in English from Eastern Kentucky University and currently teaches composition and ESL there.

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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Saturday, April 12, 2014