Starting a small business next week

[Scott4uk@cal]

Hey guys. I'm new to the board but just wanted some opinions on what I'm about to do. I'm 26 yrs old, I have an associates of psy. I am starting my bachelors next semester. I have had money saved and found a liquor store for sale right by my girlfriends clothing store. It seems to stay pretty busy and the owner wants out to be able to collect his SS and full retirement. I purchased it for 19,250 and that came with everything in the store, including a stocked floor with around 13,000 dollars in wholesale liquor. Including old vintage liquor sign that's huge. Liquor signs and ya know just the works. I have about 8,000 dollars to go in with for bills and liquor. I own a landscaping business that brings in enough to pay my 300 dollar bank loan, 300 dollar rent and 140 utilities as well as my insurance. So I'm clear with all that for 8 months of they year. I also had access to around 20,000 more dollars if I need it. What I was asking you kind people :) is how does this sound. I'm in a location of a county of 18,000 people and there are only 2 liquor stores including mine in a 15 mile radius. I'm really nervous it's my first business. I'm kind of going blindly. Can anyone offer insight ? Thanks in advance guys

[Harold Mansfield]

I know nothing about running a liquor store, but the terms, price, and rent sound great. Seems like no matter the size of the town, liquor, cigarettes and lottery tickets are a solid way to go.
Good luck to ya!

[huggytree]

i can tell by the financial details in your post that your thinking it through financially(most dont seem to)

good job...2 businesses at age 26....very impressive!!!!

1. how is your liquor store going to be different than anyone elses liquor store?
2. is there a niche or multiple niches you can get into?
3. where can you advertise to hit your target market
4. come up with a 'target market'

dont sit back and let things happen....make it happen....dont accept whatever sales the old owner had....double/triple them

good luck!

[Freelancier]

The other thing is to get a local attorney to help you the first time navigate the crazy world of liquor and business licensing. Once you know the ropes, you'll likely not need them for that, but it's always helpful to have an old hand show you the ropes for that.

Also, talk to your insurance company about liability issues. And upgrade your security system, because liquor stores are robbery magnets.

Good luck! It sounds like you did a good job so far.

[Scott4uk@cal]

Thanks so much for the responses. Yes I have tried to establish a steady clientele of yards with my mowing business. I have more than enough to cover all of the rent, utilities, insurance, and the bank loan of a reasonable 300 dollars a month. It's in a downtown area and the police department is across the street. I'm ok with that, because i would rather not contribute to illegal activity, regardless of money. I want to be professional, ethical, and follow the law. So I am planning for a security system, although I'm not sure I would have a problem there. But I like safe over sorry :).

The store I am purchasing has been in business since 1941 in the same location. I am keeping the name, and changing the way he reaches out with advertising. About 5 years ago, someone opened a store with 2 in 1. Tobacco, beer, and liquor store. It is on the other side of the county I am in and like I said its just 2 of us outside the city in the county. I am not overly concerned by them. Cops, court house workers, houses downtown area usually come to my store(closer/less merchendice)He is located on the highway a ways away.

Thanks for the responses. They really help.

[Scott4uk@cal]

i can tell by the financial details in your post that your thinking it through financially(most dont seem to)

good job...2 businesses at age 26....very impressive!!!!

1. how is your liquor store going to be different than anyone elses liquor store?
2. is there a niche or multiple niches you can get into?
3. where can you advertise to hit your target market
4. come up with a 'target market'

dont sit back and let things happen....make it happen....dont accept whatever sales the old owner had....double/triple them


good luck!

Hey thanks for the response. The kind words mean so much. I've worked hard to beat the place I use to be in. Glad to be on the board. I wonder what kind of ways I can make mine different, even though my prices will have to be at least slightly higher( less orders). And i am in college wanting a degree in speech Therapy in case the world falls;). So i don't mind living broke because that's nothing new. I have assurance. I would like to stock the back of the store full of
liquor with almost everything i earn. Does this sound like a good idea? What do some of you think! Or would I be wise to separate that into something else? My family is not on board, because I've chosen liquor. (Religious business family) So I'm on my own taking my own path! Any help is appreciated.

[Freelancier]

I would like to stock the back of the store full of
liquor with almost everything i earn. Does this sound like a good idea?

Smart businesses do "just in time" inventory these days so that they don't have all that money sitting there in assets that can walk out the back door. What they do is figure out their needs for a short period and then get their suppliers to deliver quickly in case their needs exceed their expectations. Not sure if that works well in the liquor industry where wholesalers basically have local monopolies, but you want to be sure you don't have too much money tied up in inventory that's not selling quickly, because that's money you could have used for something else.

[Studio_Jubilee]

Your new venture sounds great! Well done! The hardest part is always starting off, so stay on in there :)

A few bits of advice we recommend is to make sure you remember to consider some gentle branding when you start off. Branding doesn't = corporate, but does help existing and new customers know who you are, what you do, and how you do it.

A business with great branding is memorable, easy to understand and enjoyable. Things like business cards, a good simple website, and any promotional materials you think might be useful are a great and inexpensive place to start.

If you have any questions about branding or graphic design, we'd be happy to answer.

Good luck :)

[huggytree]

i wouldnt stock any more than needed...keep track of your inventory weekly....id order weekly to make up for the sold items.....id stock nothing extra unless its new years eve

you have to decide how to be different....i recommend finding several niche markets.....i drink 1-2 beers a year, so i no nothing of your business...its a place id never go....

it took me a couple of years to fine tune my version of being 'different'....the more it gets fine tuned the more successful you may become....

the owner of a large electrical contractor business told me once that you need to make what you do for your customer 'an experience'....for some business types this can be very difficult....but for your business i think its something that could be done

my best advice overall is NOT to just sit back.....do something to move the business forward...dont be lazy about it(like most people)(not that your going to be)

[Ted]

Hey guys. I'm really nervous it's my first business. I'm kind of going blindly. Can anyone offer insight ?

Well, I don’t have any experience running a liquor store. I do have experience running other types of retail though. I will try to offer whatever ideas I can come up with.

In my opinion, liquor stores are a commodity which makes it a bit harder for liquor stores to differentiate themselves. You see, if I want a bottle of Grey Goose or Beefeater or Captain Morgan, I can usually find those at pretty much any liquor store in my area. That is why I say it is a commodity. Most of the liquor store around me are very similar in terms of selection and price.

Let me share the reasons I go to a liquor store and what I am thinking:

Stocking Up - If I am going to be “stocking up” where I am going to be buying more than a 2 bottles of anything, then I am going to go to the place where I know they will have what I want and where I think it is going to be the cheapest. For these occasions, I will drive out of my way to go to a really big warehouse style discount liquor store. I know they will have what I want and I know their prices are cheaper than any of the small stores around in my town. I make a trip like this about once every 3-4 months. That giant discount liquor store is about 25 miles from me which is about ½ hour drive or so.

Shopping for a gift – For certain people I like to offer booze for a gift. Usually that is one of my brothers or a business associate. In this case, I will stop at a local liquor store. I will typically go to whichever one is most convenient. So, if I am already at one end of town, I will go to the store at that end of town. If I am already at the other end of town when I remember I need the gift, then I will shop at a liquor store at that end of town. If I am just running out for the sole purpose of getting this one particular gift, then I will just go to the liquor store closest to my home which is only a couple blocks away.

The reason I don’t shop at that closest liquor store all the time is because they don’t have a huge selection. Sometimes I can’t find what I want. And, their prices are a bit higher. I don’t mind the slightly higher prices though if they just had what I wanted. It seems like it is a 50/50 shot with them as to whether or not they will have what I want.


Buying wine to bring along to a dinner party with friends – When the wife and I get invited to dinner over at someone’s house, we usually bring a bottle of wine. If our wine cabinet is low then we will stop at the liquor store on the way to wherever we are going. In these cases we typically stop at whatever liquor store we know we will be driving by. I know my wines pretty well. We usually just look for a Napa or Sonoma California Red or else a New York State Fingerlakes region white whine that is in the price range we want to spend which is usually about $15 give or take. Plus it depends on how much our guests know about wine. If we know they are wine drinkers with an experienced palate, then we will spend more to get a nicer bottle. If we are uncertain about whether they are experienced wine drinkers then we usually stick to a semi-dry Riesling from New York Fingerlakes or something similar.

Buying booze for a party at our house – Sometimes I need to run out and grab a bottle of something we are out of like rum, spiced rum, vodka, rye whiskey, bourbon, gin, scotch, etc. I try to keep my bar stocked so that I have whatever someone prefers when they come over for a party at our house. So, sometimes I need to run out and grab a bottle or two. Or, sometimes I know someone is coming over who prefers a specific brand and type of booze. Then I will run out and grab a liter of that. When this happens, I will think for a minute about whether or not my closest liquor store carries that. If I think that they do, then I will run over there first. If I doubt that they do, then I will go to the closest store that I think will have that particular brand.

Those are really the only reasons I go to buy booze that I can think of. So, if I was to open a liquor store like you are doing, I would think long and hard about each of those scenarios and decide which of those kinds of shoppers I want to target. Then I would do my best to earn their business.

You will notice after looking through those scenarios that the two things that are most important are
1) Selection
2) Convenience (location)

If the store that is closest to my home had as good of selection as the other liquor stores in my town, then I would almost always shop there, even if his prices were slightly higher. There would be a limit to how much more I would pay though. If his prices were too high (more than about $2 per bottle higher on average than what most places charge), then I would go a little out of my way to shop somewhere else. But, I don’t mind paying just a couple dollars more.

He would have to always have my favorite booze in stock. I hate it when a liquor store is out of my brand of liquor. It drives me crazy. To me that is basic retail 101. You have to have what they want to buy. I am very unforgiving about that. Would McDonalds ever run out of hamburgers, French fries, Big Macs or Cokes? If my store wasn't big enough to keep enough stock, then I would keep a reserve stock of popular booze either in my basement or garage at home. That way when I needed it right away, I would have it. Call the wife - "Hey hun...can you run me over a case of Black Velvet."

[Ted]

Here are some other ideas:

1) I think quiet (subtle) background music in a liquor store is a good idea (match the music to your primary audience – no radio stations – just random mp3). None of the liquor stores in my town do it. Yet when I am shopping for booze it is usually a browsing experience where I go up and down the aisles looking and looking. So you want to have a positive, relaxing and fun shopping atmosphere.

2) Hang a big sign by your cash register that says “My goal is to carry your favorite kind of booze. So please tell me if you don’t see what you are looking for. It is my job to keep that in stock for you. But, I won’t keep it in stock unless I know that it is your favorite. Please speak up.”

3) Get to know the local people who shop at your store. Ask them their names and introduce yourself as the owner. If you shake their hands and try to get to know them, they will want to be loyal shoppers of yours. Ask them to always please offer feedback about what they wish you carried in the store. Collect their names and addresses into a contact list. Send them a postcard or a newsletter before major holidays with specials on the generic booze like rum, vodka and bar whiskey. If you have a video camera in the store, go back and look at the people again and memorize their names. Nothing impresses and endears a customer to you more than when you remember them personally. You can see their eyes light up. They crack a smile. You make their day when you make them feel important.

4) Find out who your regular wine drinking customers are. Ask them which wines they would come there to buy if you kept them in stock. Those regular wine drinkers spend a lot of money over the course of a year.

5) Dedicate a nice large section of the store to gift ideas and gift packages. In addition to having the boxed booze sets that you always see in the store, you should also have empty gift bags and bows. That way when someone is stopping for a gift, they could buy an unboxed bottle and get the gift wrap from you too. If I knew of a local store that had a big section dedicated to gift giving, then I would go there whenever I was looking to buy liquor for a gift.

I hope you like my input....

[coachcarolleek]

I would say to follow your gut instinct and do it for the right reasons. Sounded like it was convienent because your girlfriends' store is next door. What happens if your relationship ends down the road? IDK. I think that if you already have a profitable landscaping business, that you should think of expanding and growing it. That is of course, you like it and are making money on it. The liquor store idea, I would seriously give it some deeper thought. Just my opinion.

[dave@businessecon.org]

I just saw this thread. Today is your lucky day! My brother owns two liquor stores. I'm a former CPA and he is an active CPA. So you will do OK. First off, I will need to know what state you are in and your hours of operation? from there I can begin to address some other issues.

Thanks.

I'm sipping my beer right now laughing.

Dave