How to Open a Liquor Store: 14 Steps (with Pictures)

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How to Open a Liquor Store: 14 Steps (with Pictures)
How to Open a Liquor Store: 14 Steps (with Pictures)

Video: How to Open a Liquor Store: 14 Steps (with Pictures)

Video: How to Open a Liquor Store: 14 Steps (with Pictures)
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Opening a liquor store can be a great way to secure a steady income, as people turn to alcohol in good times and bad. However, this same unyielding demand generates low profit margins, which means it is difficult to get rich with a single store. In addition, the sale of alcohol at retail is extremely regulated, making the start of the venture a little complicated. However, with correct guidelines and smart strategies to increase customer base, the store can become a steady source of profit for a long time to come.

Steps

Part 1 of 2: Getting Ready to Open Your Store

Open a Liquor Store Step 1
Open a Liquor Store Step 1

Step 1. Find a suitable location

Liquor store profit margins are low and demand is inelastic, which means it doesn't change much with time or conditions. Thus, the success of your business will be totally linked to its location. If you open your store in an already saturated area, not only will your sales likely go bad, but it will hurt the profitability of a local competitor.

The liquor stores are a type of neighborhood trade. What sells in one place will not necessarily work in another. Keep this in mind when looking for a point for your business. One of the factors in market saturation is the proximity to the competition, but there are other things as well, such as the demographic and cultural characteristics of the neighborhood itself

Open a Liquor Store Step 2
Open a Liquor Store Step 2

Step 2. Hire a lawyer

Once you've set a suitable location, you'll need to find out how you can actually operate your store. Some types of places and businesses have certain restrictions on alcoholic beverages, and it is not always easy to comply with all local, state and federal laws. In fact, the requirements can be so confusing that the best course of action is to hire a lawyer to guide you through the business rules and guide you through the process.

  • For example, in the state of São Paulo, the conveniences of gas stations are allowed to sell alcoholic beverages, but consumption there is prohibited.
  • If you are thinking about opening a bar, the laws that regulate the opening hours of this type of establishment are strict and vary between cities in the country. It is important to be aware of the rule valid for your region, as non-compliance may involve the cancellation of the opening permit.
  • When laws related to the sale of beverages are not respected, the fines are usually quite high. Therefore, it is more worthwhile to invest in the help of a lawyer in advance and open your business within the law, than starting out in the wrong way, losing money with infractions and having to resort to a professional later.
Open a Liquor Store Step 3
Open a Liquor Store Step 3

Step 3. Research the market

Once you are sure that it is allowed to sell alcoholic beverages in the defined location, you will need to start creating your business plan. The first step is to know the market in the chosen region.

  • Drink emporiums are a type of neighborhood store. What sells in one area will not always sell in another, with important factors such as the cultural and demographic characteristics of the location. The more detailed the market analysis of your business plan, the more accurate your cost estimate will be.
  • Take into account details such as ethnicity, age, marital status and social class when conducting your business analysis, as these all influence how an individual drinks.
Open a Liquor Store Step 4
Open a Liquor Store Step 4

Step 4. Make cost and sales projections

Market analysis serves to know your audience. Having an idea of who your customers are, you'll be able to make sales and cost projections, considering their shopping habits and the most profitable prices in the region.

  • For example, if there are a lot of young, single shoppers in the area, you can already predict that you will sell a lot of beer and shots of drinks like tequila. Talk to wholesale distributors about crates' prices and compare with the local average price of popular brands. With this information coupled with estimates of clientele and fixed costs (including rent and salaries), you can project income and expense.
  • Don't underestimate the impact of competition on your sales.
Open a Liquor Store Step 5
Open a Liquor Store Step 5

Step 5. Ask for financing if needed

In general, the new entrepreneur should use the least amount of loans possible. This also applies to drinking emporiums; however, as the demand for alcohol is more or less constant, many financial institutions consider this an exceptionally safe investment.

When talking to the bank or institution, bring your business plan and financial statements of income, assets and liabilities, as well as recent tax returns. Although the plan itself is already quite detailed, it is important to present the other analyzes you have done, such as the market study and income projections. If you have difficulty with any of these steps, look for a tutorial on the internet or hire a professional in the field

Open a Liquor Store Step 6
Open a Liquor Store Step 6

Step 6. Get the necessary documentation to open the store

In Brazil, opening any business, no matter how small, involves registration and approval with various entities; unfortunately, this process can be complicated and time-consuming. However, without regulation, your liquor emporium cannot function legally.

On the eGestor website, you will find detailed step-by-step instructions on how to solve this bureaucratic step

Open a Liquor Store Step 7
Open a Liquor Store Step 7

Step 7. Build your inventory

This will be your biggest expense. Larger stores will have lots of exotic beverage options on the shelves, and you'll be tempted to compete with that. However, resist; initially, give priority to items that will be easily sold. The more you sell, the more profit you make and the more diverse your inventory can become.

The buy-to-resale price is usually given by one or two distributors who form the oligopoly of that particular brand (which is why it doesn't fluctuate much); so, if you want José Cuervo tequila, for example, it's not very effective to search and compare, as is done in retail. Plus, you're unlikely to get big discounts unless you buy significant volumes

Open a Liquor Store Step 8
Open a Liquor Store Step 8

Step 8. Consider hiring an employee

Almost all emporium owners work in their stores full time, especially in the beginning. However, hiring one or two employees could help you run the business more efficiently than you could alone.

Part 2 of 2: Making the Business Profit

Open a Liquor Store Step 9
Open a Liquor Store Step 9

Step 1. Offer wine tastings or mixology classes

Consumers are increasingly demanding. They like to know the nuances of the recipe for a well-made drink or to hear about an exotic little winery. Use the instructed client to your advantage.

  • Of course, you should check whether offering these small classes would be legal, but it would be a great way to keep a steady customer base in the store.
  • If you can't take wine tastings or mixology courses on site, use your creativity to achieve the same goal. You could, for example, partner with nearby restaurants or rent alternative spaces.
Open a Liquor Store Step 10
Open a Liquor Store Step 10

Step 2. Suggest accompaniments

As experts say: “Everything from the same place can be eaten together!”. The suggestion of accompaniments for beer, wine and drinks creates an air of mastery, which catches the attention of the most demanding customers.

You can even go further with the strategy and sell some of these foods (such as fruits or cured meats and cheeses) to go with your drinks. Your customers are sure to accept paying for convenience

Open a Liquor Store Step 11
Open a Liquor Store Step 11

Step 3. Increase your online presence

Make a professional, high-quality website, create an email list and ask your customers to review the store on the internet. Use social media a lot and make decoy promotions (sell some products below market price for a short period of time, in order to attract more consumers). Do everything you can to increase your visibility and recognition within your audience.

Open a Liquor Store Step 12
Open a Liquor Store Step 12

Step 4. Sponsor local events

A great way to improve your reputation in the community is by sponsoring local events such as festivals and concerts. It is not only an opportunity to sell a lot on the date, but also to create and retain customers with special promotions.

Open a Liquor Store Step 13
Open a Liquor Store Step 13

Step 5. Ask distributors for promotional items

Vendors often already offer up-to-date signage, giveaways and signs. Keep all this up to date as it will make your store look more modern.

Open a Liquor Store Step 14
Open a Liquor Store Step 14

Step 6. Always follow the law

Selling drinks to minors, even if by mistake, can generate thousands of reais in fines, in addition to imprisonment for 2 to 4 years. Always ask for the RG of customers and ask the local authorities for guidance on how to prove the veracity of the document.

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