Business Ideas | Small Business Ideas: How to Open a Liquor Store

Thursday, March 5, 2015

How to Open a Liquor Store | Business Ideas

A distilled beverage, spirit, liquor, or hard liquor is an alcoholic beverage produced by distillation of a mixture produced from alcoholic fermentation, such as wine. This process purifies it and removes diluting components like water, for the purpose of increasing its proportion of alcohol content (commonly known as alcohol by volume, ABV). As distilled beverages contain more alcohol they are considered "harder" – in North America, the term hard liquor is used to distinguish distilled beverages from undistilled ones, which are implicitly weaker. Owning a liquor store is the ideal business for many entrepreneurs, as well as for many customers. It is a business that is in demand and has no shortage of consumers. It is also a business that generates a degree of loyalty among customers, creating a base of core customers who only shop at one liquor store and shop there one or more times a week. If you run a liquor store and have recently noticed that your takings have been going in the wrong direction, you need to take action sooner rather than later. Fortunately, you can boost your bottom line in a number of ways. A combination of cost cutting and taking a long, hard look at how your business operates should help you turn things around.

Some of the fundamental requirements when it comes to opening a liquor store include: completing all paperwork, choosing what kind of store you want to set up (franchise, self-owned, or part of another store,) acquire a list of licensed liquor suppliers, and setting up security measures for your shop.

Things You'll Need

Local residency
Photo identification
Business location
Investment capital
Liquor suppliers

Instructions

Step 1

Write a business plan. Regardless of what type of business you intend to start, your first step should always to be write a business plan. This step will plan how your business will grow, how it will be managed and advertised, and how you will overcome common challenges, should they present themselves. You can download free templates for business plans on a number of websites, and then fill in the template with details about the business you plan to start.

Step 2

Research potential locations for your business. You will need to pay close attention to local zoning restrictions. Most places have restrictions that prohibit liquor from being sold near schools, churches, libraries and hospitals. Other communities may also have more liquor stores than the local population requires, making it difficult to convince the city council to issue an additional license. Conducting detailed research into local regulations is a critical step to opening a liquor store.

Step 3

Buy a location for your business. After researching local restrictions and evaluating potential properties, select a location and purchase it. You could get by with leasing the property, but keep in mind that your liquor license will be issued to the location as much as the individual. This could cause problems if you are ever in a situation where you have to change locations, which is why buying the building is preferred. If you do choose to leave the premises, make certain that you have a lengthy lease that gives you an absolute option to renew the lease at the end of the term.

Step 4

Register your business. Registering your business makes you a legally recognized company. This allows you to pay taxes on profits of your business, and also allows you to obtain a Federal Employer Identification Number so that you can tax the salaries of your employees. Contact your local city clerk's office or county clerk's office for directions on where to go to register your business. You can also register directly through the Secretary of State's office in the state where you will be conducting business.

Step 5

After you have established your company from a legal perspective, apply for a liquor license for that company, at the address of the building your purchased/leased. The process of applying for a liquor license varies from state to state. There is typically an Alcoholic Beverage Control Board at the State level, with local approval also needed from the local City Council. Contact the City Clerk's office in the town where you wish to do business for more information on how to apply for a liquor license in your area.

Step 6

Open accounts with liquor distributors in your state. Every state has liquor wholesalers who warehouse and sell alcohol to businesses that hold a liquor license. You can obtain a complete list of these companies from the Alcoholic Beverage Control Board or the equivalent office in your state.

Step 7

Check that you're getting the lowest wholesale prices available to you. You may be able to greatly increase your profit margins by buying in larger amounts from an alternative supplier. It might be worth your while leasing some storage space if you can raise the capital to invest in a large amount of stock. Wholesalers will often give a sizable discount for buying in bulk.

Step 8

Change your buying habits. Study your till receipts and work out what you're selling most of. If you find that you're selling a lot of brandy and very little gin, expand your selection of brandy and run special offers to get your stock moving more quickly.

Step 9

Offer discounts for bulk purchases. You can do this by launching a series of "Buy one, get one half price" deals, or offer larger percentage discounts for customers buying alcohol for special events or parties.

Step 10

Audit your running costs. Make sure you're paying as little as possible for your utilities and communications. You also can make savings by looking closely at your staffing levels. You may find that you can make substantial savings by letting a member of staff go and putting in a few extra hours behind the till yourself.

Step 11

Promote your store. If you can't afford to buy advertising space in local media, produce fliers and posters to hand out and display in other local businesses. You also can hire a web designer to build a website for your business and set up social media accounts to promote your store.

Step 12

Increase your opening hours. If your store isn't open all the hours it can be in the state you're trading in, you could be missing out on additional sales. Try opening for a few extra hours a day. If you don't have the staffing capacity to do so, try changing your opening hours and keeping a close eye on what happens to your sales.

Step 13

Undercut your competitors. This may reduce your profit margin, but you should make up for this in volume sales. You also can get the edge over the competition by offering a more personal service. Learn about the drinks you sell, and be on hand to offer your customers advice on their purchases.

Tips and Warning:

Liquor stores aren't as easy to start like most other businesses.Surprisingly, before you can even sell one bottle of liquor on your premises, you have to deal with cases upon cases of paperwork. Yes, paperwork – meaning you have to do lots of legwork on your own. If it is feasible, you need to retain the services of a lawyer to help you work out some fundamental issues of this business like contracts and zoning issues.
Like all things legal, you need to inquire about the all federal laws, state laws, city laws and county restrictions, not to mention zoning laws in your vicinity. A good lawyer can save you a lot of time and effort when deciphering these laws, and he can point you in the right direction should zoning issues about your liquor store become problematic. You need to find out also when you can actually sell liquor to your patrons. Different states, cities and counties have different restrictions as to the time any liquor store in their jurisdiction can sell their products. Non-compliance to the laws is considered a criminal offense.
If hiring a lawyer is not an option as of yet, then at the very least, you have to research all about liquor restrictions via the Internet before actually investing time and money into the venture. However, it should be stressed that hiring the service of a competent lawyer is really necessary when you are opening your own liquor store. If all systems seem to be working in your favor, you then must acquire your licenses and permits for your business – and these should be prominently displayed in your store at all times.
Your second option is choosing what kind of liquor store you actually want to set up. Establishing your own store under a name you have chosen for yourself is one option. Buying a franchise for an earlier established liquor store is another option. Setting up a part of a shop (say a small grocery store) with a few supplies of liquor is another option. Choosing from one of these three options is involves many things like budget, space and location, to name a few. One of the perks of buying a franchise is that the franchising office actually gives you a list of their liquor suppliers.
If however, you should decide to “wing it,” your next viable step is to get a list of suppliers for your liquor. This course of action also ends up with a pile of paperwork, and it would benefit you greatly to know all about alcohol beverage laws for retailers and licensee responsibilities. You cannot under any circumstance just buy liquor anywhere because there will periodic checks made by Alcohol and Tobacco Enforcement Agency. You also need to keep receipts from your sales and other invoices should the agents or police ask for them during these checks. Non-compliance to the Agency and its representatives can be considered as a misdemeanor.
You also have to consider the safety of your store personnel and the security of your liquor store. Liquor stores are, without a doubt, one of the most targeted stores for crime – you need to consider with utmost care on how you are to protect your investment. Installing high-tech gadgetry and posting security personnel in and around your store are options you may want to enforce, but vigilance is always the key to thwarting those who are most likely to attempt a hold-up or outright thievery.

Reference

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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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