Jokes apart, a liquor store is a brilliant entrepreneurial venture. It is one of those establishments that may possibly fetch a lot of revenue and may be extremely profitable. Starting a liquor store isn't as difficult as most of presume.
If a sensible, detailed business plan is formulated, you may very well be successful. The plan involves the pointers of market research and license application. Customer service is another important point.
Business Plan for a Liquor Store
- Research is the first and foremost step for any business plan, and it is particularly important for a liquor business.
- You need to identify your target audience, and have knowledge about the various liquor establishments and brands.
- It is also important to know where the prominent liquor manufacturers are located in your country and how many manufacturing plants they have.
- Taste all the products these manufacturers offer and study their contents.
- Obtain all the information about the manufacturers by analyzing their sales and the popularity of their brands.
- You may also consider studying their annual reports (if they are available) to get to know more about them.
- Therefore, systematically tour your city, town, or village and locate all the popular liquor stores, especially the ones that are open 24 X 7.
- Take a casual look at the store and have a look at all the brands that the store sells.
- Then, find a locality that does not have a liquor shop so that you would have less competition to start with. This is the first advantage.
- Next, as mentioned before, consider the sensitivity of your product - it is liquor, not chocolate or candy or groceries. Therefore, choose a location that does not have educational institutions or something similar.
- Apply for the liquor store license, and analyze the liquor laws as well.
- After you have received the license, approach the wholesalers of the liquor brands and manufacturers and request for catalogs and quotations.
- From your research, you would know the popularity of the brands and the liquor that is purchased the most.
- Take care of any other permits you might require, and other essential legalities as well.
- COGS (Cost of Goods Sold) is an important factor while considering the financial transactions for a liquor store. As per the website 'growthink', it is the total amount that you pay to all the suppliers for the products sold over a period.
- The reason this figure is important is because it is possibly the maximum amount you have spent. This is also recorded on the expense sheet.
- To be on a relatively safer side, you have to ensure that the COGS value is a fairly decent percentage of your revenue.
- Your capital should be sufficient enough to buy the lease for your shop, legal formalities, products, equipment, furnishing, embellishments and décor, security, and maintenance.
- The financial plan should be made over a period of half a decade, to say the least, and all financial transactions should be meticulously recorded and documented.
- Your inventory procedure should be consistent. Storage should be properly organized and care should be taken that the shop does not fall into trouble.
- Keep ecords of every transaction that occurs.
Store Planning and Execution
- Once you are through with the capital and product requirement, you can start planning the shop layout and deciding the furnishing.
- The manufacturers and wholesalers themselves may sell you the refrigeration and facility and would provide brand specific apparel for the shop.
- Bear in mind that you would have to invest a lot of money in the process.
- You need not refer to any marketing plan. Instead you can use internet, newspapers, banners, etc.
- If your marketing fund allows you, you may have a small-scale launch party.
- This may sound simple, but it is a quite difficult. The advantage is that if you are friendly, polite, and courteous, you will earn yourself loyal customers.
- A trick of trade is expressing your love for liquor. Once the customer steps into the shop, do not ignore him, nor pester him, but suggest new liquor types and brands that he would readily purchase.
- For this, you need to develop an acute skill of observation and an ability to gauge the purchase power of the customer.
- Another very important tip - never ask a customer anything other than about the liquor he is interested in. This might sound weird, but liquor store owners have observed that if a customer is asked polite and casual questions related to work or family, he gets irritated very quickly. A light discount also tends to gain loyal customers.
You would also have cops and local authorities examining your store. Hence, devise a system of recording sales and purchases and also the amount of liquor that is in stock.
In the initial stages, the store may not make a lot of money. Hence, gain popularity by using simple measures like buzz marketing. You may also consider approaching establishments, like restaurants and bars and attempt to develop long-term business relationships.