You’re ready to own a liquor store and be your own boss, but before you can get started, you need to make one important decision: Should you buy an existing store or start fresh?
Either path can be successful, but they each come with different challenges, costs, and timelines to consider. You want to make the right choice — the one that will set you up for financial success and keep your daily stress to a minimum. But when deciding between buying a business vs. starting one, how can you choose the right path?
In this guide, we’ll cover everything you need to know before deciding on the right option for your new venture.
Let's start with the basics: What’s the difference between buying a business vs. starting one?
Buying a liquor store means acquiring an existing business, complete with infrastructure, customer base, and inventory. When you buy a liquor store, you’re stepping into a business that is already up and running.
Starting from scratch means you build everything yourself. You'll scout locations, navigate the licensing process, stock your shelves for the first time, and create your brand from the ground up.
Related Read: Liquor Store Financing: 8 Ways To Finance Your Small Business
This consideration is an important one for any retailer looking to own their own business, but the decision carries extra weight in the liquor industry. Think about the following factors:
There's no universally "right" choice. The best path for you depends on your budget, timeline, risk tolerance, and local market conditions. What works for one entrepreneur might be completely wrong for another.
Let's break down the key factors, so you can make the right decision for the business you want to run.
First and foremost, we need to talk about money. Your upfront investment will look very different depending on which path you choose.
When you start a new liquor store, you're typically looking at $100,000 to $250,000+ in startup costs:
Then, you have to consider costs like insurance, legal fees, and any marketing or branding costs you incur building hype before your grand opening.
Related Read: Calculating Your Liquor Store Startup Cost: 9 Critical Considerations
Purchasing an established liquor store typically costs two to four times the store's annual earnings (measured as Seller's Discretionary Earnings or EBITDA).
That might sound like more money upfront (and it often is). Let’s take a look at why. When you invest in an existing store, you’re getting:
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The most important thing that’s included when you buy an existing store is the liquor license. This can be a major cost, time, and stress saver for a new business owner.
The bottom line: Starting from scratch looks cheaper on paper, but the revenue that comes from buying an existing store can help offset some of the costs.
Getting a liquor license can be incredibly expensive, complex, and challenging. This process can make or break your decision between buying a business vs. starting one. Let’s take a closer look at how this process plays out for both options.
When you apply for a new liquor license, you're entering a process that varies wildly depending on where you're located. In quota states, like New Jersey and Colorado, licenses are capped based on population. If you want to start from scratch in these states, you face years-long waitlists, competitive lotteries, or, worse, just be out of luck altogether.
Some states, like Utah, operate as control states. In these states, you face additional restrictions and state monopolies on certain products, and you may be restricted to carrying only beer and wine.
Beyond state-level rules, you'll navigate background checks, public hearings, and neighbor notifications. Even in business-friendly states, expect a timeline of three to 12 months or longer.
The real risk of starting from scratch when it comes to licensing and regulations is that you might invest in a location and get knee-deep in planning… just to have your license delayed or denied.
When you buy an existing store, you don’t have to apply for a new license — you just transfer an existing one that’s already been approved for that specific location.
Transferring an existing license usually takes 30 to 90 days, which is far faster than the approval process for a new license in most states.
The biggest advantage of buying an existing store with regard to licensing comes in quota states, where new licenses simply aren’t available. Plus, when you inherit an existing license, the zoning and liquor store compliance work is already done, saving you some upfront hassle.
One important caveat is to do your due diligence on the license status. Check for liens, past violations, or restrictions that could affect your transfer or future operations.
The bottom line: Both options are viable, but in restrictive markets, buying an existing store has the advantage.
Related Read: How To Legally Sell Alcohol: 5 Things You Need To Know
Your marketing challenges look completely different depending on which path you choose. Let's break down the costs and considerations for both paths.
When you open a new liquor store, you're a complete unknown in your market. Nobody knows your name, your selection, or why they should choose you over the store they already know.
If you’re starting a new business, you have to build brand awareness from zero, which makes marketing expensive and challenging. You're competing against stores with loyal customer bases and years of relationships in the community.
That said, there are advantages. When you start from scratch, you can build your brand without any baggage from the previous owners. You also don’t have to worry about a negative history from bad experiences customers might have had with the old owners.
Remember: Building a stable customer base typically takes one to two years. So, if you choose to start a new business, be prepared for slow, steady progress.
Related Read: 7 Liquor Store Promotion Ideas That Actually Work
When you buy, you inherit existing customer relationships, for better or worse. You also get existing marketing channels and vendor relationships that the current ownership has established.
This comes with both challenges and advantages.
The challenges:
The advantages:
The bottom line: Unless the previous owners had a horrible neighborhood reputation, buying gives you a major head start with customer acquisition and liquor store marketing.
Now, let’s take a look at the whole picture. How quickly can you realistically expect to start turning a profit for your liquor store with each approach?
It typically takes one to three years for a brand-new business to become consistently profitable. If you want to take the “starting from scratch” path, you’ll need to survive what many entrepreneurs call the “Valley of Death.” This period involves:
Many startup owners need to maintain another income source or prepare to live on a lean budget until the business becomes self-sustaining, which can be a downside for many hopeful business owners.
Related Read: How To Create a Liquor Store Financial Plan: 7 Simple Steps
When you buy an existing store, your path to profitability depends largely on what kind of store you're buying:
If you’re looking to invest in a struggling liquor store, you need to take a close look at why that store is struggling. If the problem is poor management or outdated systems, you can turn things around by providing better leadership or investing in a modern POS system. If the problem is a terrible location or overwhelming competition, you’ll have a much harder time.
The bottom line: Buying typically offers a faster path to profitability.
So, which path is right for you? Let’s recap the key points.
Buying an existing liquor store means higher upfront costs, but you'll reach profitability faster. You get a proven concept, easier licensing (especially in restrictive markets), and immediate cash flow to work with.
Starting from scratch gives you complete control and typically requires lower initial capital. However, you’ll have to wait longer to become profitable, and you’ll experience higher levels of risk overall.
There’s no right or wrong answer. The best option for you depends on your goals, your available resources, and your personal tolerance for risk. But regardless of which path you choose, if you want your new liquor store to succeed, you need a solid game plan and the right tools.
Ready to map out your liquor store journey? Check out our all-in-one free guide, How To Create a Liquor Store Business Plan, to set yourself up for success from day one.
Bottle POS was designed to be smart and simple. Instead of having hundreds of features that liquor store owners won't use, we concentrate on the features that really make a difference.
