How to Open a Liquor Store: Everything You Need to Know
Wondering how to open a liquor store? Other than complying with laws about selling liquor, this is much like opening any other type of business.3 min read
2. Capital Needed
3. Find a Suitable Location
Wondering how to open a liquor store? Other than complying with laws about selling liquor, this is much like opening any other type of business. You'll have to develop the skills needed to run a business, find capital for your enterprise, and pick a good location. Before you commit to opening a liquor store, consider all expenses and make sure you have the capital to get off your feet and into the market.
Opening a Liquor Store
Opening a liquor store promises steady, predictable income. This means you count on good seasons and bad — which usually leads to narrow profits and some tight months every year. Moreover, you'll have to comply with federal, state, city, and county regulations if you want to sell alcohol. Without proper experience, this can be overwhelming, but with careful planning, realistic expectations, and effective marketing, you can enjoy financial consistency by opening a liquor store.
Even after budgeting for overhead and other expenses, these businesses can pull in lots of revenue. However, you'll need to also account for the funds to get you off the ground. Some liquor stores require over $100,000 to get started.
Although lots of work goes into beginning a business, you won't get to relax once the doors are open. These are just a few of the areas that a successful business hinges on:
- Inventory management
- Human resources
- Customer service
Finally, you'll have to do lots of research to learn more about the ins and outs of this industry specifically. This includes learning all about liquors — types, brands, what they taste like, what they cost, etc. — as well as the applicable laws governing alcohol sales. There are federal regulations to contend with as well as state, city, and county rules. You'll also have to worry about the building itself. Understanding zoning laws, for example, is essential to running a successful liquor store.
Are you starting your business from scratch, or will you be franchising under an already popular name? These are two major factors that go into how much capital you'll need to get started. Some entrepreneurs think even smaller and set up kiosks in grocery stores and other places where drinks are sold. The size of the city you're in will also affect starting costs.
As an example of how much these costs can vary, consider data from Biz Buy Sell — an online business marketplace. According to this site, you could buy a liquor store in Fresno, California, for anywhere from $100,000 to $600,000. If you were to set up shop in some areas of New Jersey, it could cost more than $1 million. In addition to these up-front fees, long-term expenses like maintaining inventory are constant. Other expenses that drive up the cost of starting a new liquor store include the following:
- Licensing fees
- Leasing fees
- Inventory management
- Staffing and training
These things can increase the cost of starting a business by tens of thousands of dollars. Consider where you want to set up shop and all the expenses involved, and check these numbers against your budget to see if opening a liquor store is feasible.
Find a Suitable Location
Though liquor stores keep tight margins, you can expect consistent business flow and peaks around the same times each year. However, location is one factor that will absolutely affect the success of your enterprise. Look for a spot that doesn't have many competitors nearby. This will help you succeed and make it easier for customers to choose you over competitors in the area.
Also note that wherever you set up, you'll build a relationship with the locals in the neighborhood. As such, you'll need to appeal to their tastes and what's popular in the area. Consider this before signing a lease; if you're familiar with a certain brand and plan to make it a key part of your sales, check that it will sell there. Market saturation is another thing that will affect what people buy. Research the demographics of a desired neighborhood, what the drinking culture is like there, and whether you can set yourself apart from other stores that shoppers might choose.
In addition to the people in the neighborhood, municipal and state regulations largely determine whether you can succeed in a location you're considering. These laws regulate leasing fees based on the square footage of a space. Check that an area is affordable before moving forward.
If you need help with figuring out how to open a liquor store, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.