If you're looking for a small business opportunity that is versatile, flexible and profitable, you could do a lot worse than buying a liquor store.
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Although some liquor stores have a reputation for being seedy business ventures, most are legitimate enterprises that cater to a spectrum of customers. Some have even transformed themselves into businesses that target upper middle class customers in search of fine wine and high-end spirits.
For the most part, liquor stores are recession-proof businesses. But changing economic times require liquor stores to modify their products and sales strategies. As a potential liquor store owner, you need to make sure your business has the flexibility to adapt to changing customer needs and the ability to remain viable over the long term. Here's how to get the biggest bang for your investment dollars when buying a liquor store is on your list of business goals.
Priority #1: Licensing
Licensing is the deciding factor in a liquor store acquisition. If you don't have a valid liquor license, your new business is going nowhere fast. City, county and state licensing requirements vary from one locale to the next. Sometimes municipalities allow licenses to be transferred to a new owner and sometimes they don't. In other areas, you may even need to purchase a liquor license on the open market. The key is to thoroughly understand the licensing situation before you invest too much time and energy into an acquisition.
- Inventory. Liquor stores turn over their inventory three to four times a year. Current inventory is usually included with the business purchase, but you'll want to make sure the seller has kept up with inventory levels instead of letting the inventory deteriorate in the months and weeks leading up to the sale.
- Owner involvement. Don't buy a liquor store unless you plan to be intimately involved in its operation. Absentee liquor store owners are a disaster waiting to happen. Cash transactions, difficult customers and fluid inventories (no pun intended) mean that you'll need to stay on top of your business at all times.
- Ambiance & reputation. Today's liquor stores are much more than booze warehouses. Many offer ambiance that appeals to amateur wine connoisseurs and trend-conscious clientele. Straightforward liquor stores are also common, but you'll need to know what kind of a vibe you're going for before you buy the business because it can be difficult to transition between models.