Opening a Liquor Store: A Short SBG Guide

ByDanica Djokic
March 01,2022

If you love beer and wine, the thought of opening a liquor store is one you’ve probably considered on more than one occasion. While many industries have suffered in recent times, the liquor industry is still going very strong.

The global market revenue in 2022 is estimated at $1,810,873 million, while research into recent trends shows that people have shifted towards drinking at home gatherings rather than social occasions due to the COVID-19 pandemic. There has arguably never been a more exciting time to enter this business.

So what do you need to open a liquor store in 2022? Read on for all the answers you need.

Why Owning a Liquor Store Appeals to People

Before starting any business, you must first be sure that it is the right venture for you. Otherwise, you will inevitably struggle to maintain the motivation needed to establish the brand and achieve sustained success.

Aside from the general appeal of becoming your own boss, the following perks are what makes working in the alcohol industry great:

  • Flexibility - you can open a wine store, a convenience liquor shop, or even sell alcohol as a section of a larger grocery store.
  • Ongoing demand - while there is a spike during the festive season, alcohol sales remain high all year long.
  • Product/brand recognition - you can stock brands that consumers are already familiar with. This can subsequently make marketing a lot simpler.
  • Recession-proof - like running a food truck business, this venture won’t suffer as much as other businesses due to broader economic issues.
  • Online selling - in addition to your brick-and-mortar venue, a liquor store business can switch to online sales easily.

In truth, there are many other reasons to start a business of this kind. The products appeal to millions of adults, boast a long shelf life, and don’t require huge storage space. Meanwhile, you probably already have a good understanding of the products and will enjoy learning more about them. The knowledge that you’ve helped enhance social lives is also hugely rewarding.

The Cost of Opening a Liquor Store

Before even looking at the finer details of a business plan, you must first check the financial viability of opening a liquor store. The harsh reality is that it’s not cheap. Moreover, it’s the initial outlay that is most likely to pose a major stumbling block. 

The expenses that you will face during the pre-launch and early phases of running the business will include:

  • Acquiring a liquor license, which will cost several thousand dollars.
  • Finding a store to let, which can again cost thousands of dollars.
  • Renovations to the store, including racking and shelving as well as decor and new POS terminals.
  • Inventory, which is likely to cost anywhere from $20,000 to $50,000.
  • Marketing costs that may cover branding materials, website building, and covering the local marketing channels.

Overall, it is not uncommon for business owners to spend $100,000 on launching the liquor business. Following this, you can expect to keep spending thousands of dollars each month on staffing, marketing, and running the premises. Of course, any stock you sell will need to be replaced, too, so you have to factor in resupply costs as well.

You can reduce some of the costs of opening the business by finding an existing liquor store for sale or an opportunity to open a franchise instead of your own brand.

Steps to Opening a Liquor Store

If you're wondering how to start an alcohol business venture, perhaps the most important tip is to ensure that no stone is left unturned. With the right action plan and strategy in place, you can tap into the multi-billion-dollar industry easily.

Here is a list of the top tips that can help you in the process of opening your alcohol store.

Complete the Necessary Market Research

Before you can open a liquor shop business, you must understand the marketplace you are about to enter. Checking state and national industry statistics will be crucial while you should also take some time to analyze what is already available in your location. 

As well as knowing what’s available, you need to think about the gap in the market you’ll exploit. With this in mind, you need to consider the target market too. Some of the key questions to ask include;

  • Who are the people buying the alcohol?
  • How do they buy alcohol - online, offline, convenience store?
  • How often and what quantities do they buy liquor in?

Understanding the industry will help you set realistic expectations and learn how the profitable business sector can build you a brighter future. 

Write a Business Plan

A business plan is a legal document that will subsequently help you with funding and gaining liquor store permits. Crucially, it is an item you can return to time and time again throughout the planning phases for guidance.

You can find business plan templates online, including solutions specifically for alcohol distributors. It should cover these key aspects:

  • Your mission statement and purpose for the business.
  • Relationship between the target demographic and the product.
  • Details of your operations and management plan.
  • Design plans for products, services, and branding efforts.
  • Financial projections for at least the short and mid-term goals.

A solid business plan will become one of your most valuable assets because it can help establish trust from investors while also giving employees a clear action plan and brand identity.

Find the Right Location

The right location is one of the most important things to consider when opening a liquor store, not least because it will have a huge influence on foot traffic and overall liquor store income levels. Even if you plan to sell online too, a prestigious location and strong reputation in offline circles will aid the cause. 

There are several factors to consider at this time. Ask yourself the following questions for guidance;

  • Is it close to residential areas? Because over 45% of all searches are now local and consumers looking for liquor stores near them will provide a lot of your visitors.
  • Does the venue offer good public transport access and ample parking?
  • Is it in close proximity to other venues that people may visit before or after wanting alcohol? If so, this can have a significant impact on your visitor levels.

The right location may additionally open up drive-thru liquor store options, or at least the potential to provide a curbside pick-up service. Similarly, it may enable you to provide local deliveries directly to your customers without losing too much time or money,

While you won’t confirm the venue just yet, creating a shortlist of ideal locations and anticipated costs will serve you well going forward.

Focus on Funding

The harsh reality is that your business idea won’t go any further if you do not have the funds to get it off the ground. As already stated, you may be looking at a bill of over $100,000 to launch the company before tapping into any potential liquor store profit. 

There are several ways for creative entrepreneurs to raise funds. Some of the most popular include:

  • SBA loans or business loans for bad credit.
  • Private investments from local or national investors.
  • Crowdfunding from friends, family, and other interested parties.
  • Personal loans or selling assets.
  • Federal or state business grants. 

The most important thing is to analyze all of the options. After all, a lack of capital is often the reason why one in two ventures fail within five years, so make sure you are well prepared, and not just for the opening few months.

Forming a legal entity is one of the most important requirements to open a liquor store. It is not possible to start trading until you have completed this step. The main types of entities that you are likely to consider are:

  • A sole proprietorship, where the business is solely owned by you. 
  • A partnership between two or more liquor store owners.
  • A Limited Liability Company (LLC), which works as something of a hybrid between a partnership and a corporation.
  • A corporation, which is a legal entity established to conduct particular types of business.

Entrepreneurs looking to open liquor store businesses will often choose a sole proprietorship or an LLC depending on individual circumstances. Speaking to a dedicated legal advisor or lawyer is the best way to make the right selection for your business needs.

When forming your legal entity, you’ll also want to consider the name of your company. Remember that the name of your liquor store can be the same as the brand name, but it doesn’t have to be.

Get Your Bank Account and Licenses

How much does a liquor store make? It doesn’t matter if your business doesn't have a bank account to conduct transactions or a license to sell alcohol. Securing a bank account with a business credit card will require a visit to the bank with your ID and Employer Identification Number (EIN). As s liquor store, you’ll need a physical address, which shouldn’t be a problem since you’ll need a property anyway, unless you plan on selling online only.

As for licenses, you will need to check state and national regulations. To complete this phase, your state’s Alcohol Beverage Control Board will determine;

  • Who can be served and who can serve alcohol.
  • The times during which your business can operate.
  • The limits on prices on the volume of alcohol sales per customer.

In addition to the liquor store permits, you may need to consider special licenses for online sales.

Organize Your Finances

A liquor store has high start-up costs, and you will encounter a lot of transactions (income and outgoing costs) once your doors open. As such, keeping your finances organized will be vital. To get this right, you’ll want to complete a range of steps. These include:

  • Finding a suitable accountant with experience in supporting liquor store businesses.
  • Putting insurance in place - including Liability and Liquor Liability Insurance, data protection coverage, and Workers’ Compensation Insurance.
  • Managing your invoices, expenses, operational costs, and projected financials.

Just because you have funding doesn’t mean you don’t need to spend your capital wisely. Besides, good organizational skills enable your liquor store business to have a great headstart and enter the market, creating a profit in record time.

Establish Your Marketing Strategy

Branding and marketing are essential features of every business model. An alcohol store isn’t any different. After cementing your brand name and choosing the right color scheme and logo, you must establish the best marketing strategies to help your business thrive in the industry. 

When dealing with Pay-Per-Click (PPC), the cost per click in the alcohol industry is higher than in other industries. Insight like this should help you decide where and how to promote your company. Some of the options you’ll need to consider are:

  • Shop signage to attract foot traffic.
  • A strong website and SEO plan to attract local online traffic.
  • Social media campaigns to raise awareness and show the brand image.
  • Shop layouts and staging of products.
  • Local media placements and ads.
  • Referral marketing and recommendations.

The great news is that many of the products you stock will already be supported by extensive marketing campaigns from their manufacturers. Perfect your branding skills, and you’ll be rolling in cash, too.

Set your Prices

Setting the prices is an essential step for your business. You need to find the sweet spot between healthy profit margins and keeping consumers happy. In most cases, markups will be around the 25-40% mark. However, a convenience store's prices will likely differ from those in a wine store, so bear in mind the type of shop you’re planning to open.

Crucially, you’ll need to divide all beverages sold into four categories:

  • House beverages. 
  • Standard branded liquors.
  • Premium liquor brands.
  • Super-premium brands.

Your liquor shop business will probably run special promotions on a regular basis, but knowing your general pricing before opening the doors will be key to having a strong start.

Build Your Team

When opening your alcohol store business, a lot of the success will depend on having the right around you. In fact, you’ll have already embraced the support of experts like accountants, lawyers, market researchers, bank managers, license vendors, and web designers by this stage. However, you’ll still need the most crucial aspect for the success of ongoing daily operations - the employees.

Workers may include floor workers, cashiers, customer care experts, in-house marketers, drivers, and more. You will want to keep the numbers as low as possible due to their salaries and bonus costs like healthcare and 401K contributions. When hiring employees, be sure to test their;

  • Knowledge of the alcoholic beverages industry as a whole.
  • Knowledge of their specific job role and the tasks within it.
  • Personality traits and alignment with your business philosophy and goals.

A winning team won’t only represent your alcohol store in an effective way but will help your business grow and prosper.

Stock Your Inventory

As mentioned above, stocking your inventory could account for up to $50,000 right at the start of your business journey. Therefore, managing it well is one of the most important steps to opening a liquor store, and for that, you’ll need a good Point of Sale system. It should be able to:

  • Track all stock in real-time,
  • Compile reports of all sales and automate purchases.
  • Give clear info for managing order fulfillment. 

In addition to the right stock management system, you should ensure that the liquor store is protected by insurance. This will help prevent losses caused by bottles dropping off the shelves or shoplifting. Naturally, a sound security system should be installed for further peace of mind.

Prepare for the Opening

By now, you will have:

  • Satisfied all legal requirements.
  • Built a winning brand and designed your store logo, layout, etc.
  • Financed the liquor shop business.
  • Found a winning team of employees.
  • Stocked your business with the right products.

All that’s left is to arrange your big opening. Use this as an opportunity to build excitement for your new company, and local drinkers will quickly check out what your business has to offer. We’ll raise a glass to that!

Final Words

Opening a liquor store business does require hard work and a significant investment. When done well, though, it is one of the most stable industries to be involved in. Crucially, a combination of online and offline sales will enable you to achieve significant profits for immediate and long-term success. 

If you are passionate about alcohol and running a business, there has never been a better time to start.

Frequently Asked Questions
How profitable is owning a liquor store?

It can be a well-earning business, yielding overall annual profits of around 20-30% on average. That said, the actual profit margin is not very high, as most profits have to be reinvested in restocking inventory and paying all of the running expenses such as employee salaries, power bills, etc. Furthermore, this figure will be influenced by many factors and may be much lower in the first year of founding your business. 

Is buying a liquor store a good investment?

Liquor stores are considered a good investment as the demand for alcohol is solid throughout the year because even pandemics and financial market crashes won’t stop consumers from buying alcohol. For stability and earning potential, it is a great business solution.

How much does a liquor store owner make a year in the USA?

Factors such as location and whether the store is a part of a grocery store can impact this figure. However, the average small American liquor store can expect to yield a yearly revenue for the owner of around $50k. 

What is the markup on liquor in a liquor store?

Liquor markups at a liquor store aren’t as high as those in restaurants or nightclubs. However, a significant markup of 25-40% can be expected on most products and even higher for specialty beverages. Make sure to research prices in the neighborhood well before opening a liquor store.


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Instead, firing them on Monday early in the day gives the person the rest of the week off to rest, recuperate, and regroup. Arrange To Meet With The Employee Employees usually already know termination is on the cards, particularly if they broke company policy or have already had a series of conduct warnings. While you shouldn’t explicitly state the purpose of the meeting in a message, make sure they know what to expect, so you don’t leave them stewing. To fire someone with dignity, take them to a private place in your office and do it face-to-face. Don’t terminate them in front of other employees – only a trusted witness from your HR department, if necessary. Never fire people over the phone, or through text. Start With The Bad News During the termination meeting, always start with the bad news. Tell the employee that you’ve decided that it is best to let them go. Include the complete context for the termination in your statement, so the employee can have a clear picture of what has happened to them. Here is a script to fire someone for poor performance that you can use during the meeting: “Hello, Joe. Unfortunately, I have some bad news for you. Based on your performance, we have decided to terminate your contract, effective immediately. This means that you are no longer an employee of this company.” Notice how the opening line of this statement warns the employee about what’s coming next: It is then followed by the bad news that the employee has lost their job. There is no ambiguity: The company rep is ending employment immediately. When firing someone, avoid saying things like “I know how you feel,” or “This might hurt right now, but in the future, you’ll look back and say it was the best thing that ever happened to you.” You can (and should) express your regrets about the situation, but saying that you know how it feels while causing those feelings will seem tone-deaf at best. You also don’t know what consequences your decision will have on their life. Also, don’t say things like “I might be willing to change my mind if you improve,” unless you mean that. Otherwise, these statements indicate that there are grounds for negotiation when there aren’t. Unless that’s a genuine option, don’t allow an employee to take a pay reduction for continued employment at the firm, either. Also, never discuss personality traits or characteristics of the employee when firing them. Outside of hostile or discriminatory conduct towards other employees, these things can hardly be part of the reason for the firing. Bring Up Performance Issues Once you terminate the employee, you’ll then want to allude to the reasons, highlighting the many warnings you provided along the way - and make sure the warnings were really there. Show them evidence of their poor performance and follow-ups that you made at each step. If necessary, bring copies of various worker monitoring metrics, emails, and feedback reports from clients.  Since you should have provided the employee with coaching sessions, bring evidence of these to the termination meeting. If HR put the person on a 30, 60, or 90-day performance plan, use this to demonstrate that, as a company, you did everything you could to prevent the person from being fired. Cover The Essentials Once you’ve delivered your message, you’ll then want to simply go through the essentials about what happens next. Discuss things like: Unused vacation time Severance pay Pay for the month worked so far Remaining benefits Changes to computer access Explanations to coworkers Fulfillment of ongoing projects At this juncture, the goal is to give the employee a roadmap for out of employment. Mention all practical details that concern them and let them know that you will be taking care of those. Finalize The Meeting Termination meetings themselves shouldn’t last long - half an hour is the maximum. To fire an employee in the correct way, state all the necessary information according to your company handbook, and thoroughly explain the reasons behind your decision. Once you deliver the information, and allow the employee time to react, wrap up the meeting quickly, focusing on the worker’s dignity at all times. The legal implications of firing someone badly can be quite severe, so always be professional. After delivering the bad news, allow employees to connect with their friends and family for emotional support. Follow Up Ideally, you’ll schedule an exit interview for the employee you’ve fired after a short while (e.g., a few weeks or a month after their termination). This will give them a chance to work through their experience and give you the feedback necessary to prevent similar situations in the future.  Also, at the time of firing, you’ll want to give the employee a letter containing all the critical details of their termination before they leave the office. This outlines the legal reasons for the employee being let go. Termination letters should include: A statement that the employee is being fired Reasons for the termination Practical instructions for returning any company-owned property Information about any remaining wages, benefits, or insurance you will pay Information about pensions A concluding remark indicating that you are sorry to see them go Here is a termination letter example:  “Dear [Full Name],  This letter is to inform you that your employment with the company is terminated, effective immediately [date]. You are being fired for failing to meet company performance standards (or repeated misconduct). Please return your badges, keys, and equipment to the reception desk by [date]. You will be paid for the hours worked this month and will receive your final pay packet on [date]. Your health insurance will also be terminated from [date]. I am sorry about this decision to terminate your employment.  Respectfully,  [Signed] [Your name] [Title]” Provide Continued Healthcare Paperwork Point out that your employee may be able to continue on their healthcare plan for a short time after they leave, thanks to the Consolidated Omnibus Budget Reconciliation Act of 1986. Your HR department should be able to provide them with any necessary paperwork. Thank Them For Their Services The last step is to simply thank the person for their services. Offer your best wishes for their future. Further Reading What Is HRIS? An HR Professional’s Guide The Best Job Posting Sites Job Satisfaction Statistics: Keep Your Workers Happy and Your Business Healthy Wrapping Up Unfortunately, even the best way to fire someone will likely cause pain to the employee being fired. However, by following the right protocols, you can reduce risks dramatically and make the process easier for everyone. Learning how to fire someone isn’t technically challenging, but it can be emotionally difficult, which is only natural. Always keep in mind that behind poor performance scores sits a person, and make sure the already difficult situation doesn’t further impinge on their dignity.
By Julija A. · February 24,2022
If you’re a company manager, you know it can be extremely disruptive when employees don’t turn up for their shifts. Work doesn’t get done, deadlines are delayed, and clients get angry. Inevitably, people will call in sick from time to time, but what to do when workers don’t contact you about an unscheduled absence? Here’s where a “no call, no show” policy can help. These documents spell out the repercussions for employees if they fail to show up at work with no notice, and serve to protect you. What Is a “No Call, No Show” Policy? No employee can turn up to work every single day of their career. Something will inevitably go wrong. Emergencies that prevent them from carrying out their duties include: Being involved in an accident Contracting an illness Bereavement Transport cancellations No sane employer disciplines employees for missing work for these reasons. However, even in these unexpected and unavoidable situations, most workers will still call the office to tell them they won’t be able to make it. By contrast, when a worker does not show up to work or call to give a reason why, it is called a “no call, no show.” This is something most companies treat extremely seriously, due to the potential cost it can cause. As the name suggests, a “no call, no show” policy is a document that sets out what you will do in the event that an employee fails to show up to work and doesn’t call to explain why. As an employer, it is up to you how severely you treat not showing up to work. Under the law, you are technically allowed to fire an employee for failing to show up for work after a single day, so long as you don’t base your decision on their immigration status, any form of discrimination, retaliation, or breaching contracts. However, both you and your employees are only human, so it’s advisable to be more lenient than that. Having an overly strict "no call, no show" policy may also encourage employee theft, as a form of retaliation for firing someone unfairly. How To Create A “No call, No Show” Policy When creating a “no call, no show” policy, be reasonable: In certain situations, such as car accidents or the death of a family member, most employees’ first thought won’t be, “I must call my boss and tell them that I won’t be coming to work today,” so make allowances for such events. Don’t punish employees who have legitimate excuses to call off work. This way, you can improve brand image and employee loyalty. Step 1: Create The Rules The first step is to think through the rules you want to set (while ensuring that you abide by current employment law). For instance, you might specify that employees need to inform their manager at least 30 minutes before their shift starts if they cannot attend. You may also state in your policy that if an employee fails to show up to work and does not call, you will get in touch with their emergency contacts to establish their wellbeing. Step 2: Define The Consequences The next step is to define the policy-violation consequences. Generally, companies don’t severely punish one-off “no call, no shows,” but they do if it becomes a pattern. For instance, if an employee goes three days off work with no contact, you may decide that this is sufficient grounds for a “no call, no show” termination. Step 3: Communicate The Policy To Your Team Once you’ve decided on the rules and consequences for violations, you’ll need to communicate your new policy to your team. Most firms subsume it into their regular attendance policy or employee handbook. Make sure everyone in your organization reads and agrees with the new policy. Then leave the policy in an easily-accessible location, along with all other company documents. “No Call, No Show” Policy Template Here’s a “no call, no show” policy sample you can use to create a tailored document for your organization:  If you do not show up to work and fail to call your manager 30 minutes before the start of your shift with an excuse for your absence, we will define it as a “no call, no show” incident. As stated in the Company Attendance Policy, we will then enter this into your personal record. This policy does not apply to the accommodations under the Americans with Disability Act (ADA) or the Family and Medical Leave Act (FMLA).  To comply with this policy, employees must contact their manager not less than 30 minutes before the start of their shift. If employees do not follow this procedure, they may be subject to disciplinary action or dismissal. Employees absent for three or more days must provide the Company with proof of their illness with a doctor’s note. They must also supply a fitness for duty release before resuming work.  Further Reading Employee Tracking Software - The Best Solutions The Best Free Payroll Software for Small Businesses What Is Payroll and How Does It Work Wrapping Up Firing someone for a “no call, no show” situation isn’t something any manager wants to do. Therefore, the manager should outline a clear “no call, no show” policy in a document read and agreed to by all employees. This protects employers by spelling out company legal consequences if a worker fails to show up to their post and doesn’t notify the employer beforehand.
By Julija A. · February 23,2022

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