Americans are drinking more than ever, which has helped the liquor business grow by 35% over the past decade to more than $70 billion. You could start your own retail liquor store and gain from the boom. It takes a little money to get started, but you can make a good living.
Before you start, you’ll need to drink in some business knowledge. Luckily, this step-by-step guide will give you all the tips and information you need to run a successful wine store.
Step 1: Find Out if this is the Right Business for You?
Starting a business is a decision that only you can make, and not every chance is right for you. Entrepreneurship isn’t easy, so you should take some time to figure out if IV fluids is the right choice for you.
Positives Vs Negatives
| A lot of people like to drink. Socialize – Meet and talk to all kinds of people Recession Proof: People drink more when the economy is bad | State Regulations – Licenses and rules must be followed Long Hours: Liquor shops are usually open all day Low Margins: A 10% profit margin is good for a booze store |
Industry Trends
- Size of the market and past growth – The US beer, wine, and liquor store business is worth an impressive $72.5 billion and has grown by an average of almost 5% per year over the past five years. It’s grown more than 20% in the last three years alone.
- Growth forecast: The global market for alcoholic drinks is projected to grow by 10.5% per year through 2025, so a liquor entrepreneur has a real chance to make money.
- Number of businesses: In 2022, there were 40,600 beer, wine, and liquor shops in the US.
- Number of jobs: There will be 190,000 jobs in the beer, wine, and liquor store business in the US in 2022.
Cost of Starting Open a Liquor Store
You can start an online booze store for around $8,000. Costs include licenses, a website, and supplies. To open a physical liquor shop, you’ll need to spend $60,000 or more to rent the space and stock the store.
Is Open a Liquor Store Profitable?
Your average sale per piece should be around $20. Your earning margin for an online store should be about 25%. If you have a physical spot, it will be around 10%.
In your first year or two, you could work from home and sell 200 goods online every week, bringing in more than $200,000 a year. If the spread is 25%, this would bring in $50,000. At this point, you could open a physical liquor shop and hire staff, lowering your margin to 10%. Your sales could go up to 100 items per day. With an annual income of $730,000, you’d make nearly $75,000 a year.
Entry Barriers
- Licensing standards and rules
- Financing the cost of goods
Step 2: Create a Strategy
Identify a Gap
Do research on liquor stores in your area and online to find out about their goods, prices, and what sells best. You are looking for a market gap to fill. For example, the local market might be missing a booze store with all the latest pre-made cocktails and seltzers.
This could jumpstart your word-of-mouth marketing and bring in customers right away.
Solutions
You’ll have to look at the most popular types and names of liquor to decide what to stock. You’ll also need to decide if you want to sell beer, wine, and booze. You could also sell tobacco goods and food items to make more money.
Pricing
Your prices will depend on how much you pay to wholesalers. You’ll add 25–30% to those prices to get your selling prices. When you have a physical shop, your costs will be rent, overhead, and labor. You should try to make a profit margin of 10%.
Once you know your costs, you can use this Step By Step Profit Margins Calculator to figure out your markup and end price points. Remember that the prices you use at start should be open to change if the market calls for it.
Target Market
Your main market will be everyone over 21. You should promote your business on sites like TikTok, Instagram, and Facebook.
Location
Choosing the right place for your booze store is very important. It can make a big difference in attracting people and building a successful business. When choosing a site, you should think about things like visibility, accessibility, demographics, and competition.
Look for a place that is visible and easy for possible customers to get to. Check the surrounding population to see if there is a need for a liquor shop.
Also, be aware of how much competition there is close. By carefully considering these things, you can choose a site for your liquor store that will make it more likely to be successful.
In the beginning, you may want to run your business from home as an online shop to keep costs low. But as your business grows, you’ll likely need to hire people for different jobs and rent a shop. Find business space to rent in your area on sites like Craigslist, Crexi, and Instant Offices.
When picking a commercial space, you might want to follow these rules of thumb:
- Central position accessible via public transport
- Ventilated and roomy, with good natural light
- Flexible leases that can be stretched as your business grows
- Ready-to-use space that doesn’t need big renovations or repairs
Step 3: Write a Business Plan
Each business needs a plan. This will help you guide your startup through the launch process and stay focused on your main goals. A business plan also helps possible partners and investors better understand your company and its goals:
- Executive Summary: A brief outline of the whole business plan. It should be written after the plan is finished.
- Business Overview: An overview of the company’s vision, purpose, ownership, and corporate goals.
- Products and services: Describe your services in depth.
- Market study: look at market trends, such as changes in demand and growth prospects, and do a SWOT analysis.
- Competitive Analysis: Analyze your main rivals by looking at their strengths and flaws and making a list of the benefits of your services.
- Sales and Marketing: Look at your company’s unique selling points (USPs) and come up with sales, marketing, and promotion strategies.
- Management Team: An overview of the management team, including their jobs and professional backgrounds, as well as a corporate hierarchy.
- Operations Plan: Your company’s operational plan includes procurement, office location, key assets and tools, and other logistics details.
- Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss forecasts, cash flow, and a balance sheet.
- Appendix: Add any extra financial or business-related documents.
Step 4: Create a Marketing Plan
Some of your business will come from casual passersby or online users, but you should still put money into digital marketing! Getting the word out is especially important for new businesses, as it will increase customer and company awareness.
Once your site is up and running, link it to your social media accounts and vice versa. Social media is a great way to promote your business because you can make interesting posts about your products:
- Facebook is a great tool for paid advertising because you can target specific groups, like men under 50 in the Cleveland area.
- Instagram has the same benefits as Facebook, but it’s for a different group.
- Website: SEO will help your website appear closer to the top of relevant search results, which is a key part of growing sales. Make sure that your website’s calls to action are set up well. Try changing the size, color, and placement of calls to action like “Buy Now” This can greatly improve sales.
- Google and Yelp: For businesses that rely on local customers, getting mentioned on Yelp and Google My Business can be crucial to getting people to know about them and buy from them.
- Signage: Put up eye-catching signs in your store and on your website.
- Email marketing and newsletters: Send regular emails to customers and leads. Make them more special.
- Start a blog – Start a blog and post to it regularly. Change up your content and share it on various sites.
- Look for referrals. Offer incentives to customers who send you to new clients.
- Paid ads on social media: Choose sites that reach your target market and make focused ads.
- Pay-per-click (PPC) marketing – Use Google AdWords to do better in searches. Do research on your keywords first.