How to Draft a Liquor Store Business Plan
Start by drafting a liquor store business plan. It’s a critical first step that you must take to properly orient your business for success. However, to the uninitiated, building a liquor store business plan is easier said than done.
Fortunately, there is a simple business plan checklist you can reference for some industry tips. To build the very best business plan for your growing liquor store, we recommend following these steps:
1. Write an Executive Summary
Your executive summary encapsulates the most important parts of your business including a brief description, markets that you’re planning to compete in, and some of the financial needs of your business.
The executive summary is used as a top-line overview of your business. Most investment bankers and venture capitalists will scrutinize your executive summary, paying particular attention to your goals and objectives. Without an executive summary, most investors will toss your business plan aside.
2. Define Business Goals and Objectives
Next, define your business goals. What is it that you're trying to accomplish? How will you measure the success of your business?
When setting goals, it’s important to engage with your employees. Be sure to let them know how their decisions and day-to-day activities affect your progress to goals. Equip your workforce with the tools and resources they need to help your business achieve its financial goals.
3. Perform Competitor Analysis
Next, identify and analyze your closest competitors. What do they get right? What do they get wrong? What can you learn from your competitors?
During your analysis, be sure to document the following:
- Background (location, history, ownership, organization structure)
- Financials (growth profile, growth model)
- Products (brands, inventory)
- Marketing (markets served, customer profile, distribution channels)
- Personnel (number of employees, management, executive team)
HubSpot offers a great competitive analysis template to help you get started.
Create a thorough business plan. That way, you can fully map out your timelines and perform market research.
How to Register Your Liquor Store
To open a liquor store, you must obtain the appropriate local, state, and federal permits/licenses. Of course, the requirements (and associated fees) vary depending on your unique business, its location, and more.
The U.S. Small Business Administration (SBA) offers a complete overview of required documents across multiple industries.
One document that cannot be overlooked is the liquor license. Unfortunately, most municipalities limit the number of liquor licenses available. As such, securing a liquor license is highly competitive.
If you’re overwhelmed with the thought of applying for and securing a liquor license, it’s important to start the process as early as possible. In some cases, the entire application process can take months to complete.
Start by contacting your state’s governing agency. Refer to the Alcohol and Tobacco Tax and Trade Bureau (TTB) for a detailed directory with links to major liquor license authorities in each state. In some states, the total cost of a liquor license can amount to more than $17,500. Moreover, the complexity of the liquor license application varies significantly across state/municipality.
Learn about the specific liquor laws in your area. This can greatly impact your business plan. Secondly, apply for a liquor license. How long does it take to get a license? Timing is important because your store could be delayed from opening. Next, find the right business intelligence tools (POS system, accounting software, etc.) Finally, hire the right people.
How to Select a Profitable Liquor Store Location
You’ll need to secure a profitable business location. Here a few prioritizations you should make when selecting a location:
1. Prioritize Locations Within Your Budget
Don’t overspend on your business location! It’s one of the most fatal mistakes that small business owners make during the planning phase. Before long, you’ve committed thousands of dollars towards the “best” business location with no sales or customers to show for it.
Take an honest look at your operating expenses. How much can you really afford to spend on your business location? If you choose to work with a realtor, be sure to communicate your budget from the outset.
2. Prioritize Locations Based on Vendor/Supplier Location
Plan on selecting a location within distance of preferred vendors and suppliers. There’s nothing more crippling to the success of your new liquor store than having to wait days (or weeks) for supplies to arrive. Any delay in raw materials will ultimately affect your inventory levels and profits.
3. Prioritize Locations Based on Demand
It’s best to select a location that is free from competition. Ideally, your business should be located within walking distance of major attractions such as college campuses, restaurants, and markets.
Look for locations where there are complementary businesses in the neighborhood. For example, if there is a restaurant nearby that offers BYOB, your liquor store will almost assuredly prosper.
4. Prioritize Locations Based on Parking
It’s important to prioritize locations that offer ample parking.
“No matter how attractive your business is, sufficient parking should be a key consideration. Does your business location have a convenient parking lot, or will customers need to pay for parking? If paid parking is your only option, you’ll also want to consider if your business will offer validation. And don’t forget about your employees here – they'll also need somewhere to park,” recommends NerdWallet contributor Sally Lauckner.
Make sure you have your vendor relationships established so you can get all the products you expect to offer to differentiate your store from other mainstream outlets in the area. Local liquor areas can win a big following by offering unique specialty products that are trendy or niche.
How to Open a Liquor Store Bank Account
Among the mission-critical tools that liquor store business owners must utilize, there is none greater than a business bank account. From tax preparation to obtaining a business loan, separating personal and business finances is a smart move for any aspiring business owner.
Additionally, compared to personal credit cards, business credit cards offer some unique advantages, including higher credit limits and attractive sign-on bonuses. The best part is that interest rates for business credit cards are at an all-time low. There is no better time than the present to invest in a business bank account or credit card!
There are some great business banking providers out there. Equally, there are hundreds of great business credit card providers, including Capital One, VISA, and American Express.
Speaking of credit cards, your POS system must come equipped with powerful payment processing. POS Nation doesn’t require you to leave your payment processor, however, know that an integrated payment processor is one of the easiest ways to streamline your checkout process.
Always make sure to shop around for a credit card processing company that is reliable and has competitive rates.
How to Market a Liquor Store
During our time as an industry-leading POS system provider, we’ve seen some amazing liquor store promotions. Not only are liquor store promotions a great way to attract new business, they’re also a fantastic way to show current customers that you appreciate their patronage.
Here are some great liquor store promotion ideas that you can snag:
1. Cocktail Samples
Did you know that free cocktail samples can raise profits by nearly 15 percent? It might seem counterintuitive, but it’s true! It can get a bit tricky, especially when you consider state/local regulations regarding the distribution of free alcoholic beverages. For this reason, we recommend keeping alcohol sampling in-store, and giving away the ingredients found within the cocktail if you want to send customers home with samples. That way, your visitors are responsible for purchasing liquor and building the cocktail they tried on their own time.
2. Wine Pairing Nights
Try hosting a wine pairing night! During these special events, you might consider partnering with a local bakery or dairy. With a little preparation, you can find a community partner that pairs perfectly with your selection of wines.
And the best part is that all parties benefit! It’s a great way to highlight other small businesses in your area. Additionally, you’ll have a much easier time selling your wares when food is involved!
3. Free Swag
Everyone likes free stuff, right? We recommend printing up a few t-shirts, hats, or any other fun products that are in your budget. Gear with your business logo and web address on it is a great way to show customers that you care. It’s also a great way to score some free advertising.
4. Mixology Sessions
Finally, try hosting a mixology session. There’s a good chance that your store carries all the ingredients needed to mix an amazing cocktail, right? You might even consider teaming up with local bartenders. The bartenders benefit by promoting their business, and you benefit by having a professional on-site to mix up some stellar drinks!
Liquor can be difficult to market, so you have to get creative! In this industry, in-person promotions perform much better than digital marketing efforts.
How to Find a Liquor Store Point of Sale System
Finding the right POS system for your unique business is one of the most important considerations that you need to make as a business owner. It should be noted, however, that not all point of sale systems are equal. In fact, thousands of business owners just like you overspend on costly POS software and hardware. There has to be a better way, right?
Stop us if you’ve run into one of these POS system issues:
- Mandatory monthly fees with costly long-term contracts
- Unreliable product and technical support
- Hundreds of hidden fees and monthly “add-ons”
- Generic software with lackluster features
- Flashy hardware that’s difficult to use and manage
There’s a better way with POS Nation.
From complete pricing transparency to industry-specific features that you need to launch and manage a profitable liquor store, POS Nation offers the very best POS software and hardware for growing small businesses.
In your search for the very best liquor store POS system, we recommend prioritizing vendors that offer the following:
- Cash discounting
- Age verification
- Sales reporting
- Advanced inventory tracking
- Payment processing
POS Nation offers all of these great features — and more! We could tell you about all the great services and features we offer, but we’d rather show you. Schedule a free demonstration today to meet with one of our point of sale experts. It’s a great way to see first-hand how business owners and managers like you use POS Nation to grow and manage successful businesses!
Don’t put a point of sale off until you’re about to open. Plan for set up and training. A POS system can help you keep organized while you’re receiving inventory, working with vendors, creating pricing, and more. Find a POS that works for your industry. Liquor stores have specific needs many providers won’t cater to.
