Buying A Liquor Store - Tougher Than Most But Even Greater Potential? - By: Richard K Parker

Some enthusiastic businessmen think that buying a liquor store is like getting a license to your own ATM, a place where you can simply print out the money that you need to meet your lifestyle. While a liquor store for sale can be a good investment, you have to understand that it needs to be run very precisely to make it all work. There's a lot of regulation in this industry, with higher operating costs eating into your margins. Remember that these margins can be on the lower side if you are in a competitive area and this will require you to focus very well.

It's important to really understand the motivating force behind the seller's wish to move on. Is there a hidden reason, which could make it equally difficult for you to "make a go" of this business? Study the books really well to calculate your margins and investigate any anomalies carefully.

State authorities regulate liquor stores very carefully and in many cases you will have to personally qualify in order to move forward. You need to check your own eligibility before you put too much effort into finding suitable candidates. Check with state and local jurisdictions to see what stipulations may be placed on the business going forward. In some areas you cannot transfer an existing license or get a new one to operate the business so do your homework.

Never underestimate the amount of work that you will have to put into this style of business to be successful. Certainly, if the outgoing seller has been somewhat successful, it only makes sense to try and mimic their style and methodology after the takeover.

There's plenty of potential when you buy a business such as this, but you need to exercise close management. This is especially true when it comes to stocking. Remember that you cannot easily reorder individual bottles and generally have to buy cases. You can get sharp discounts if you buy cases in volume, so make sure that you price this into your projections if you feel that you need to do so to compete with any other nearby stores.

Don't underestimate the monthly costs, especially the cost of your utilities. The walk-in cooler can be expensive to operate and your insurance premiums may be higher when you buy liquor store business assets, as compared to other retail businesses. Remember that the majority of customers will opt to use credit or debit cards to pay and those fees can eat into margins.

But there is extra opportunity if you think carefully about the type of business that you are looking at. People generally buy wine, beer or liquor when they are in a celebratory mood. They may be celebrating a birthday, preparing for a wedding reception, entertaining friends and so on. This gives you, as the new owner, plenty of opportunity to strike up good relationships with your customers, as they look at your establishment as a place that they visit during "good times." Interact with them as much as you can, remember their names and be involved.

This kind of activity will give you plenty of feedback as they opt to choose your establishment exclusively and recommend their friends as well. Remember that this type of business lends itself to customer interaction much more than a typical convenience store, for example.

About the Author

Richard Parker, the President and founder of Diomo Corporation - The Business Buyer Resource Center, wrote the How to Buy a Good Business at a Great Price series of books. Why not turn to his consulting advice, seminars and materials for experienced tips if you are considering buying a business? Look here for essential information on how to buy a business=> http://www.howtobuyaliquorstore.com

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