Many people dream of owning a small business.
Small business ownership brings the opportunity to carve out your unique path to success, make meaningful connections with lifelong customers, and build something that you can be proud of.
As an aspiring entrepreneur, you’re probably interested in the financial reality behind this dream. If you launch your own liquor store, how much will you make? What does it take to be profitable in the liquor industry?
In this blog, we’ll talk through all the factors that affect your liquor store’s profitability — and how much you can expect to bring home at the end of the day.
How Much Does a Liquor Store Owner Make? The Data
As a small business owner, your earnings are based on how well your liquor store performs financially.
Owning a liquor store can be a lucrative endeavor. Most stores have a 20 to 30 percent profit margin, but that figure can reach 50 percent for very successful businesses.
The varying profit margins of liquor stores in different niches and locations means that there’s a wide range in liquor store owner earnings, with industry reports indicating salaries from $40,000 to over $100,000.
As a small business owner, your earnings are up to you — but your store’s overall financial health is a major factor determining your salary range.
Other Factors That Determine Liquor Store Earnings
The complicated — but most accurate — to the question of what liquor store owners make is that it depends.
Your salary as a small business owner will be based on your store’s overall financial success, and your store’s potential to make a profit is influenced by a number of factors. Let’s explore a few:
- Location: Placing your liquor store in a high-traffic area will result in more sales, but keep in mind that these locations are often more expensive and will lead to higher expenses.
- Niche: The types of bottles you carry will impact your profits. Some liquors, beers, and wines can be marked up more than others, generating more revenue.
- Competition: The presence of other liquor stores in your area can impact your small business’ success, meaning that you’ll have to find ways to make your store stand out.
If you’re in the early stages of opening a liquor store, these are key considerations. Making strategic decisions about where your liquor store should be located, how much space you need, and what role you hope to fill in your local liquor market will put you on the best possible path to success.
How Much Should You Pay Yourself as a Liquor Store Owner?
We’ve covered the average salary data and the factors that will affect how much you can make as a liquor store owner — but how much should you be making as a liquor store owner?
Most small business owners approach their personal salaries in two ways.
The first way is to pay yourself first. In this method, you treat your salary as a static business expense and subtract it from your store’s overall revenue. Many entrepreneurs take this strategy because it gives them financial peace of mind — which then allows them to put all their energy and care into boosting the success of their business.
The second method is to pay yourself a fixed percentage of your store’s overall profits. In this approach, you calculate all of your expenses, subtract them from your total revenue, and then pay yourself a portion of the profit left over.
Let’s walk through an example of this method. If your liquor store brings in $200,000 annually and your expenses are $120,000, you’ll be left with a profit of $80,000. If you’ve decided to pay yourself 60 percent of your profit, your annual salary will be $48,000.
Ultimately, the choice of how to pay yourself as a liquor store owner is up to you. If you spend most of your time in your liquor store, you may want to consider paying yourself a fixed salary and treating it as a business expense. If your liquor store is more of a side business and requires less time and effort from you, a percentage-based approach may work best.
Set Your Liquor Store Up for Success
Since your earnings will depend on your small business’ financial health, it’s in your best interest to make your liquor store as profitable as possible.
Here are a few key tips for keeping your sales high:
- Tackle liquor inventory management: Keeping your liquor store well-stocked with your shoppers’ favorite bottles is essential for happy customers and high sales numbers. Make sure your store’s point of sale (POS) system has robust inventory management tools that save you time and keep your stock levels accurate.
- Build customer loyalty: Repeat customers are critical for profitability. To keep your customers coming back again and again, implement a customer loyalty program that entices them to spend more at your liquor store through rewards points, exclusive discounts, and special perks.
- Pay close attention to your sales reports: Accurate sales reports are paramount for the success of your business. Not only do they help you determine your earnings as a small business owner, but they also identify important sales trends and help you make important staffing, inventory, and operational decisions.
If you’re looking for a liquor store POS solution that can grow your business, look no further than Bottle POS.
Bottle POS is an all-in-one point of sale solution that has all the tools you need to help your liquor store thrive — including powerful inventory management features, a built-in customer loyalty program, detailed reporting, and an e-commerce platform to help you make sales online.
Schedule a live demo today to see how Bottle POS can make a difference on your small business journey.
