In my extensive experience with helping individuals buy all sorts of businesses, I’ve repeatedly noticed something thought provoking about people who are selling liquor stores. Almost all of them are suffering from severe burnout!
If you tour a number of liquor stores that are for sale, you’ll discover what I mean. The places are usually dingy, and there are bottles on the shelves that could have been sitting there for years. The lighting needs updating, the walls need paint, and boxes of old stock are piled up in the storerooms. 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 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 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 it is, it has to have 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 district which is improving will always provide you with more opportunities 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 ask for more exclusive wines, get those products on your shelves in anticipation of popular demand.
Then we get to 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 choice of strategy depends on your budget, your sales and the size of your establishment.
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. 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. Remember, you can’t get the business from any of the upscale clientele by rolling on a fresh coat of paint on dirty old shelves. Look at windows, lighting, floor areas, wall coverings and more. Even your cash registers need to be up-to-date and 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. If people are looking for a good bottle of wine, or some excellent beer to compliment a good meal, why not offer them cheese, olives, crackers and other elegant appetizers? Remember to check local ordinances and zoning to be sure you can sell foods 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 provide your Website visitors with the ability to order products directly from your site. 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.