How to Make Big Money with a Liquor Store
In my many years of helping people buy businesses, I have noticed something interesting about people who are selling their liquor stores. They’re almost always suffering from severe burnout!
If you check out a variety of liquor stores that are up for sale, you’ll see exactly what I’m talking about. The places are usually poorly taken care of, and there are bottles on the shelves that could have easily been laying around for years. The lighting needs to be replaced, the walls need a couple coats of new paint, and boxes of ancient stock are piled up in storage areas. I have even seen injection-molded plastic signs on the walls for brands of beer that aren’t even available anymore.
Sounds dismal, right? Well, not really, because all those factors can spell opportunity just for you, a smart buyer.
Here are the crucial steps to turn that underperforming liquor store into a money machine!
Step one: Make sure that you purchase the correct store!
First things first… You have to buy a store with untapped demographic potential. It could be an older “mom and pop” liquor store in a neighborhood that has recently been transformed by the arrival of younger, well-to-do professional consumers. It could be in a part of the city where new office complexes are planned. Whatever your choice, it must have significant growth potential.
Avoid buying a liquor store in an area that’s in decline. Sometimes such stores can be generating positive cash flow by selling half pints of liquor and flask-style bottles of inexpensive wine, but let’s face it; a store in an area that’s improving will always offer you more potential for growth and increased profitability.
Step two: Cater to a more professional type of clientele!
If you’re in an region that’s bringing in an increasing number of professional people, begin building an upscale inventory that will appeal to these customers. Don’t wait for people to ask for more exclusive wines, get those products on your shelves in anticipation of popular demand.
Then we arrive at the issue of customer service. If you want to capture an upscale customer group, you’ll have to be able to answer questions about various wines - which wines are highly rated, or which go best with a particular kind of food.
One way to provide this service is to hire knowledgeable salespeople. Another way is to hire enthusiastic people and train them, or perhaps become a wine expert yourself. Your decision on a strategy depends entirely on your budget, your current sales and the scope of your business.
Step three: Make your upscale store look the part - from day one.
If your store needs renovation or freshening up before it can appeal to your new clients, make sure you budget for this - and always reserve a realistic amount of money for fix-ups. Come to a reasonable figure for how much the entirety will cost, and make this a key factor of your calculations as you negotiate with the Seller for a fair price. Keep in mind that you can’t get any new business from upscale clientele by slapping on a new coat of paint on broken down old shelves. Carefully look at windows, lighting, floor surfaces, wall coverings and every other detail you can think of. Even your cash registers have to be absolutely spotless.
Step four: Expand your product offerings beyond alcoholic beverages.
Over the last decade, upscale liquor stores have begun to offer gourmet cheeses and other food products. It makes sense to expand in this way. Use your intuition, and if people are looking for a good bottle of wine, or some really great beer to have with a evening meal, why not provide a choice of cheese, olives, crackers and other interesting appetizers? Don’t forget to check local ordinances and zoning to make sure that you can sell food products at your location.
Step five: Hold in-store events to attract more of your target clients.
Hold wine tastings, cooking classes and cheese seminars in your store. If an author has recently published a book on wine or cheese, have a book signing on your premises.
Events do more than sell products. They give your store the feeling of a community - and a destination.
Step six: Build an Internet presence.
Set up a store Webpage where you recommend wine, liquors and beer. On your Webpage, make sure to put a sign-up form where customers can subscribe to a professional email newsletter, in which you distribute detailed information about your products.
Also, in your newsletter, add in coupons for rebates on wines, beer and a variety of other products, and make an effort to be creative with discovering new ways of making it as simple as possible for your customers to recommend new subscribers to you.
Always give your Website visitors with the choice of ordering products directly from your Website store. You can offer local delivery if you have a vehicle, or low cost shipping to a wider area. Be aware, however, that you may be prevented by law from shipping alcoholic beverages to other states, and make sure to check this out before you buy your store, so you can get a realistic idea of the business’s true overall profit potential.
Richard Parker is the President and founder of the Diomo Corporation - The Business Buyer Resource Center. His inspiring materials, seminars and consulting have assisted thousands of business buyers with achieving their life long dream of buying a business.
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