Trying to launch a new liquor store without an airtight budget is kind of like making an old-fashioned without the bourbon – it just doesn’t make sense!
Unfortunately, most business owners are blindsided by the costs and fees that come with opening a new liquor store. Additionally, there are a handful of legal requirements that new business owners must comply with. In most cases, complying with these laws and regulations comes with a hefty price tag.
All of these costs and fees are enough to make any owner or manager pull their hair out!
So, how much does it really cost to open a liquor store?
In this article, we’ve identified some of the biggest liquor store expenses. By the end of this blog post, you’ll have all the information needed to budget for your new business.
How Much Does it Cost to Open a Liquor Store?
Having a clear understanding of liquor store costs and fees well in advance of opening your doors will help you budget and forecast appropriately. Creating an airtight budget with an accurate representation of your expenses is one indicator of a successful business venture. Opening a liquor store can cost upwards of $100,000, especially if you have surprise expenses.
The most crucial factor in planning for your liquor store costs is getting ahead of those “surprise” expenses. Having a clear understanding of what many liquor store owners end up spending down the line and learning from their mistakes gives your business an edge.
Your standard costs are going to differ from other liquor stores mainly because of your location. Costs will vary depending on your state taxes and fees, along with the average price of inventory and real estate in your area. Note that in this article, we’re going to give you a ballpark figure for each investment area.
1. Liquor License
Obtaining your liquor license is typically the first step you need to take to determine if you’re allowed to open up a liquor store in your area. Unfortunately, opening up a liquor store comes with strict regulations regarding where and how you can operate.
Before doing anything else, we recommend obtaining your liquor license and getting the exact specifications of the type of establishment you qualify for and the locations you’re allowed to operate around. Once you have determined you’re eligible for obtaining a liquor license by contacting your local governing body, you can submit your application. Some liquor license applications come with small fees, but the real cost is when you purchase the license.
Liquor licenses can range anywhere from $300 to $14,000, depending on your state. Although this license can be a significant cost, it’s one of the most essential costs to your operation so that you can avoid legal ramifications. Your liquor license also expires, so this is a recurring cost for your business every couple of years.
2. Business and Zoning Permits
Once you have your liquor license, the next step is finding your business location and applying for relevant permits. In many states, zoning and business permits are not permitted for liquor stores within a certain radius of schools or places of worship. These restrictions and zoning ordinances will give you additional paperwork and permit information to fill out compared to what the average business owner needs.
When searching for your state’s business permit costs, it’s crucial to know that the permit you’re looking for could be a business and/or zoning permit. The cost of business and/or zoning permits can range from under $100 to thousands of dollars in any state. Once you apply for your business and/or zoning permits, your state’s Alcohol Beverage Control (ABC) board will review your application.
3. Marketing and Advertising Costs
Marketing and advertising are some of the hidden costs of operating your liquor store. If you’re in an easily accessible area that gets a lot of organic foot traffic, marketing and advertising might not be a problem for you. Alternatively, if your location is not ideal for foot traffic or you’re having trouble moving certain inventory, you might have to depend on marketing and advertising.
The best way to avoid marketing and advertising becoming a surprise cost is to create a comprehensive marketing plan. Your liquor store marketing plan should include top promotional ideas and be revisited every quarter.
Marketing and advertising costs for liquor stores can easily exceed 7 to 8% of gross revenue depending on your location, advertising needs, and advertising methods. This differs from other small retail shops because the average small business owners spend less than the recommended amount by the U.S. Small Business Administration.
Considering liquor stores were deemed an essential business in 2020 amidst the COVID-19 pandemic, it’s crucial to always have an accurate inventory plan. The biggest key to inventory management that we have seen is using inventory management software. Using a plug-and-play point of sale (POS) system that includes inventory management features eases the burden of inventory tracking.
The average liquor store inventory costs depend on your square footage and local inventory prices, but many stores spend upwards of $60,000 to 100,000 monthly on inventory. If you would like more in-depth information about liquor store inventory management, check out our Guide to Liquor Store Inventory Management. In that guide, we cover common inventory problems, must-have inventory management features, pro tips for better inventory management, and insights into liquor laws and regulations.
Graphical CTA? Guide to Liquor Store Inventory Management
5. POS System
Inventory management is just one of the many benefits of using a POS system. Unfortunately, many POS system providers overcharge and underdeliver, leaving liquor store owners like yourself frustrated and planning for a new investment.
At POS Nation, we give you all the features and tools you need and nothing you don’t. If you have all the tools you need to run your liquor store, then that’s one less thing you have to worry about when it comes time to launch.
POS system features commonly used by liquor stores include:
- Reliable payment processing
- Inventory tracking and management
- Promotion management
- Mix and match bottle pricing
- Age verification features
- Cash discounting options
- Sales analysis and reporting
What Does Your Liquor Store Need to Succeed?
Now that you know how much it costs to open a liquor store, the next step is to start applying for your permits and planning your investments.
We’ve served thousands of liquor stores, and there is one thing we recommend checking out right now: The Guide to Liquor Store Inventory Management. In this guide, we’ll give you all the insider intelligence needed to master inventory management and take your business to the next level.
Super Liquor made the switch to POS Nation and the results speak for themselves. How can we help you level up your liquor store business this year?