How to Change Your Liquor Store into a Thriving Business

By Simon Natta • July 21st, 2009

In my many years of helping people buy businesses, I have noticed something interesting about people who are selling their liquor stores. They’re usually suffering from extreme burnout!

If you tour a number of liquor stores that are for sale, you’ll discover what I mean. 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 come across injection-molded plastic signs on the walls for brands of beer that don’t even exist 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 you buy the right store!

First things first… You have to buy a store with untapped demographic potential. It could be a well established “mom and pop” liquor store in a neighborhood that has just recently been converted by the arrival of younger, upscale 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. Occasionally such stores can be pulling in positive cash flow by selling half pints of liquor and flask-style bottles of low cost wine, but let’s be real about this point; a store in a district which is improving will always provide you with more potential for expansion and increased profitability.

Step two: Cater to a more upscale 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 request specialist wines, get these products on display in anticipation of the 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 store appear to be 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. Arrive at a reality-based figure for how much everything will cost, and make it part of your calculations as you bargain with the Seller for the most realistic purchase 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. Look at windows, lighting, floor areas, wall coverings and more. Even your cash registers have to be brand new and perfectly clean.

Step four: Expand your product offerings beyond alcoholic beverages.

Over the last decade, upscale liquor stores have started to provide gourmet cheeses and other tasty foods. It makes sense to expand in this way. Use your intuition, and if people are trying to find a great bottle of wine, or some really good beer to go with a hearty meal, why not offer a selection of cheese, olives, crackers and other tasty 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 a well known author has recently published a popular book on wine or cheese, have a book signing at your store.

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 this Webpage, be sure to build in a sign-up form where customers can subscribe to your state-of-the-art professional email newsletter, in which you send out comprehensive information on your products.

Also, in this newsletter, insert a variety of coupons for rebates on wines, beer and other products too, and make an effort to be innovative with finding out new ways for making it as easy as possible for your customers to recommend new subscribers to you.

Always present your Website visitors with the opportunity to order products strait from your Website store. You can provide local delivery if you have a car, or inexpensive shipping to a wider region. 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 author of the How to Buy a Good Business at a Great Price series. As President and founder of Diomo Corporation – The Business Buyer Resource Center, his materials, seminars and consulting have helped thousands of business buyers realize their dream of buying a business.

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