You want to own a liquor store, but you’re worried it’s not as simple as setting up shop.
You’re right! It’s not that easy — mainly due to complex regulations, expensive inventory, and other challenges. But if you do it right, you’ll definitely be rewarded.
If you’re wondering how to open a liquor store that creates a buzz, you can use this quick guide to get you started. Follow these eight steps to make sure you’re the best in the business.
How To Open a Liquor Store: The Skinny
Before you get started, it’s good to have an idea of how much the whole process will cost. Even if it’s just a ballpark figure — knowing what your initial investment could look like avoids nasty surprises down the line.
The current estimate is around $100,000. There are various factors that could make that figure smaller or larger; we’ll get into those later.
While we’re on the subject of finances, you might also wonder: are liquor stores profitable? Will you get a return on your investment? With proper inventory management, clever marketing, and excellent customer service, your store can absolutely be profitable.
Now, let’s outline how to open a liquor store.
- Write a liquor store business plan
- Choose your location
- Seek and secure funding
- Get licensed and insured
- Purchase inventory
- Invest in a liquor store point of sale (POS) system
- Hire your team
- Market your store
Don’t skip any steps! With this quick guide, you can open a liquor store that’s ready to succeed. Let’s dive into the details.
Step #1: Write a Liquor Store Business Plan
You need a top-shelf business plan to support your success as you open your new liquor store.
Not sure where to begin? Here’s a common list of items to include in your plan:
- Executive summary and description
- Product and service identification
- Market and competition analysis
- Company and management structure
- Financial planning
- Your purpose, and a plan to make it happen
First, write a general overview of your business, starting with the executive summary. Feature the key points — but remember that this is a highlight reel, so you don’t need to dig too far into the details. (This summary might be easiest to revisit after you complete your plan, when you know everything you need to include.)
Next, create a company description. This is where you do provide a more comprehensive look at your business — the who, what, why, when, and where.
- Who? Think about who you want to be as a small business owner, who you want to employ, and what to name your business.
- What? Consider what you plan to have in stock. Do you want to sell straight spirits, or include wine and beer, too?
- Why? Remember your reason for starting a small business. Why do you want to open a liquor business in the first place? What are your business goals?
- When? Establish a timeline of what your store opening looks like, and then what you think your operating hours will be.
- Where? Decide where to open up shop — the success of your business depends on location, location, location.
Step #2: Location, Location, Location: Choose the Right One
It could be a make-or-break decision, so don’t take it lightly.
Consider the neighborhood first and foremost. Is it safe? Will it be receptive to a liquor store? Think about the local community, its demographics, and income levels.
Next, is a liquor store allowed in this location? Evaluate zoning laws and specific requirements imposed by your state.
Last, consider your budget. Depending on the size of your store and its location, prices vary.
For example, a busy street in the inner city will set you back more than a quiet street in the suburbs. Retail spaces vary from state to state, too. For example, in southern California, you might pay $35 per square foot; in Detroit, Michigan, it averages $17.19 per square foot.
Step #3: Secure Funding & Open Your Bank Account
If you don’t have $100,000 lying around, what are your options? Start with a business loan. Before lenders provide you with a loan, they’ll want to see your personal and business credit history. They’ll also assess your cash flow projections, business plan, and estimated startup costs.
There are various types of loans you can source:
- Traditional bank loans and lines of credit
- Alternative loans like online lenders
- Small Business Administration (SBA) loans
- Angel investors and venture capitalists
- Family and friends
Once you get your loan, you’ll need to register your business and open a business bank account. A business bank account is critical because it separates your business and personal finances, protecting you and your business.
Step #4: Get Licensed and Insured
Once you’ve completed your business plan, it’s time to move on to the next step — and it’s one of the most important.
Opening and running any kind of business is a complex process, but when your business sells alcohol, you need to navigate more unique requirements — including appropriate permits and licenses.
Like any retail business, you likely need to secure a retail license, sales tax license, city, county, and state licenses — and a liquor license. (Remember to check your specific state regulations regarding liquor licenses, to make sure you’re following the correct guidelines.)
The liquor industry is not only tightly-regulated, it’s high-liability — make sure your bases are covered with high-quality insurance.
First, you need general liability insurance, which protects you from being held legally responsible for third-party risks, or damage caused as a result of the products you sell. Liquor stores present considerable risk, when you think of the hundreds (or thousands) of bottles of spirits sitting on shelves. Don’t risk a lawsuit over spilled scotch.
And of course, you need liquor liability insurance — this covers damages caused by your customers while under the influence of the products you sell, which is important when you sell intoxicating products.
Running a liquor store is a huge responsibility, and you have to take special care to protect your business and your customers. Make sure you prioritize securing these liquor licenses, permits, and insurance policies.
Step #5: Purchase Your Initial Inventory
Once you’ve designed your store and considered layout, you can start to stock your shelves! The fun part. There’s nothing quite like seeing your store full of the right types and brands of alcohol. But how can you make sure you’ve got the right inventory?
First, consider profit margins. Which types and brands offer the best margins? Research market demand and your location. Next, look for inventory management software that tracks stock levels and sales, and helps make better buying decisions. Liquor store inventory management is easier with the right tools.
Last, consider your pricing strategy. Economic conditions will have an impact, and you might adjust your prices based on competition and customer preferences.
Step #6: Invest in a Liquor Store POS System
Smart business owners choose smart business tools. If you want your operations to run smoothly, that starts with a quality point of sale (POS) system—and one made specifically for the liquor industry.
Advanced inventory management is a priority when it comes to running a store with such a high number of items.
Designed specifically for liquor store owners, by liquor store owners, Bottle POS has an auto ranking feature that will color code your products and rank them depending on how they’re selling — you’ll know what to stock more of, and what to stock less of. Maybe your customers prefer Scotch whisky over Irish whiskey. (Plus, auto invoicing streamlines the receiving of this inventory.)
This knowledge will ultimately increase your profits, and catering to your customers might get them back in store. Remember to set up a loyalty program, and regularly communicate with your returning customers through the integrated marketing feature — send promotional and reminder text messages directly from your POS system.
Don’t forget integrated customer loyalty programs, either. They encourage repeat business and give customers discounts, special offers, and access to exclusive events.
Last but not least, if you’re ready to boost your business even more, BottleZoo is an e-commerce integration that can set your shop up for success online — and allow you to offer local delivery and pickup.
Step #7: Hire Your Team
Your staff can help take your store to the next level if you train them well. Hiring the right people is essential. Next, train them in the following areas:
- Customer service: Your staff should be knowledgeable and friendly to keep customers coming back.
- POS system usage: Set employee permissions to protect your inventory and reputation. Then train staff on how to use your point of sale system and software. Focus on processing transactions and managing inventory.
- Selling alcohol: Educate your employees about the laws and regulations surrounding the sale of alcohol. With built-in age verification features, your liquor POS system helps ensure staff can follow legal requirements.
Teamwork makes the dream work. Hire wisely!
Step #8: Maximize Your Marketing Efforts
Now, you’re ready to reach your audience.
Think about where your potential customers get their information.
Do they still check their mailbox regularly? Send direct mailers. Are they opening up their inbox? Try an email marketing campaign. Do they scroll through social media? Establish an online presence, and make sure it’s on the right channels for your audience.
No matter how you decide to get the word out, be clear about your brand. What kind of liquor shop are you opening? A corner-store quick stop, or a high-end store with top-shelf tequila? Both have their audience, but it’s important to decide which is yours.
Amp up your messaging to attract the right customers for your unique liquor store.
Related Read: 4 Alcohol Marketing Guidelines You Need To Be Aware Of
How To Open a Liquor Store: Complete!
Congratulations! You’ve written a business plan, secured your licensing, amped up your marketing, and found the best business tools for your new store. Opening a business can be quite the undertaking — but it’s absolutely worth it.
So pop a bottle, and raise a glass to your brand new liquor store.
If you’re ready for the best-in-class liquor POS system, schedule a demo with one of our Bottle POS specialists today!
Do you feel like you need a more detailed breakdown of how to open a liquor store? Then check out our The Ultimate Guide to Opening a Liquor Store! It’s like this, but even more in-depth and actionable.
