For those of you who can responsibly appreciate fine wine, liquor, and spirits, you may have considered opening your own liquor store in the past, or perhaps the idea has only recently come to mind.
Liquor stores are among the recession-proof and depression-proof retailers. Back in 2007, when the housing market crashed, triggering The Great Recession, liquor retailers managed to stay afloat by virtue of the products they sold. The reason for this is simple—people like to drink during good times and bad.
Nearly 90 years prior, The Great Depression caused retail businesses of all industries to fail, but liquor stores held strong. At that point in American history, the prohibition of alcohol had lifted, giving the downtrodden unemployed the ultimate consolation—a stiff drink to help them forget their troubles.
Even today in 2021, after a year of pandemic-induced lockdowns and business closures, liquor stores were never required to shut their doors. Meaning, in addition to being recession and depression proof, liquor stores have proven to be pandemic-proof as well!
All this is to say that opening a liquor store in today's economic climate is actually a relatively smart idea, and this article can help you get your liquor business off the ground. By reading this article, you will learn about:
- • Liquor Store Business Requirements, Permits, & Licenses
- • Business Entity Types that Best Fit Your Liquor Business
- • The Best Liquor Store Point-of-Sale Systems
- • Effective In-Store Digital Signage Solutions
- • Loyalty Rewards Programs that Boost Sales
If your dream is to open a liquor store, there's no reason you can't turn that dream into a reality!
LIQUOR STORE BUSINESS REQUIREMENTS, PERMITS, & LICENSES
Liquor stores are unique business entities due to the specific requirements, permits, and licenses that are needed to stay in compliance with city, state, and federal regulations.
Before you even legally file the paperwork to establish your liquor store as a sole proprietorship, partnership, corporation, or LLC, you first need to make sure that you will not be disqualified from obtaining the necessary liquor business licenses. The following are five statutory disqualifiers that will prevent you from holding a State Liquor License. If any of these apply to you, you will not be able to open a liquor store in your name:
- • Persons who have been convicted of any felony, or for promoting or permitting prostitution, or sale of liquor without an alcoholic beverage license.
- • Persons under the age of 21 years.
- • Persons who are not United States citizens, aliens admitted to the United States for permanent lawful residence, or citizens of a reciprocal trade nation.
- • Persons whose alcoholic beverage license was revoked for cause within the past 2 years.
- • Persons who are police officers and / or police officials.
Depending on the specific state in which you plan to open your liquor store, there could be more guidelines and disqualifying factors, so be sure to check your state and local liquor ordinances.
There are additional factors to research as you select a location for your liquor store. The following represents additional factors that apply to New York State liquor businesses, but again, be sure to check the ordinances that are relevant to your state:
- • Tied House Laws
- • 200 Foot Laws
- • One Store Laws
Tied House Laws
The “tied house law” prohibits any person who holds a direct or indirect interest in any manufacturing or wholesale business (whether in New York State, another state, or abroad) from holding a wine or liquor store license in New York State.
200 Foot Laws
The “200 foot law” prohibits the NYS Liquor Licensing Authority from issuing a wine store or liquor store license to any premises which is within 200 feet of and on the same street as a building exclusively used as a school or place of worship. If the location of your store is within 200 feet of a school or house of worship, you will be limited to selling only beer.
One Store Laws
A licensed wine store or liquor store owner may only own or have an interest (direct or indirect) in one wine store or liquor store in New York State. This law is specific to NY State, and places strong limitations on retailers. You cannot open a chain of liquor stores in New York.
Next, you'll need to know which alcohol license you want to apply for. There are two, namely a wine store license and a liquor store license. If you plan on selling both wine and liquor, then you should apply for a liquor license, which includes the sale of wine. This license is more expensive than a wine license.
Wine Store License
A wine store may sell wine, wine products, cider, and mead. Other items that may be sold are limited to corkscrews, ice, non-flavored & non-carbonated water, and other mixers, accessories, and glassware. This license must be renewed every 3 years.
Liquor Store License
A liquor store may sell wine, wine products, cider, and liquor. Other items that may be sold are limited to corkscrews, ice, non-flavored & non-carbonated water, and other mixers, accessories, and glassware. Just as with a wine store license, this license is good for 3 years, after which it must be renewed.
BUSINESS ENTITY TYPES THAT BEST FIT YOUR LIQUOR BUSINESS
Once you confirm that you will be able to obtain the right alcohol license, you must then create your business entity, file for a Fed Tax ID Number, and register your business with your state. There are a number of business entity types to choose from, which are:
- • A Sole Proprietorship
- • A Partnership
- • A Corporation
- • A Limited Liability Corporation, or LLC
This business entity type makes no legal distinction between the business owner and the business entity. Meaning, there is no legal or financial separation between you, your personal finances, your store, and your store's revenue. For this reason, we strongly advise that you do not open your liquor store as a sole proprietorship. If you do, you will have no personal nor personal financial protection if and when your business is sued.
The defining characteristics of a partnership business is that the business entity is shared by multiple owners. There are two types of partnerships—general and limited. In a general partnership, the partners share debts, profits, and obligations. In a limited partnership, some owners are general partners, who operate the business and assume liability. Whereas, other partners have limited involvement, serve as investors only, do not make integral decisions, and are not subject to the same liabilities as the general partners.
A business corporation, also referred to as a C-corp, is a legal business entity that exists separately from its owners. Corporations offer business owners the strongest level of personal liability protection against lawsuits that could be filed against the business. However, fully incorporating your liquor store as a C-corp might not be necessary, especially if you're only planning on running one store.
Limited Liability Companies, or LLCs, vary state by state, and each state in the U.S. uses a different set of regulations concerning LLC businesses, so be sure to research how your state handles this business type before you file. Generally speaking, LLC owners are called "members," and the nature of this type of business legally separates the owners from the business entity in a manner similar to a C-corp. For this reason, filing an LLC to open your liquor store could be the best option.
THE BEST LIQUOR STORE POINT OF SALE SYSTEM
After filing the business entity paperwork, applying for an appropriate liquor license, and purchasing or leasing your liquor store location, the next step is to implement the Point-of-Sale system you'll use to sell wine, liquor, and spirits at your shop.
Unlike other retail businesses that are restricted by state laws, regulations, and compliance ordinances, liquor stores are legally required to abide by a whole host of laws, the most critical of which is the minimum age requirement. No alcoholic beverages can be sold to anyone under 21 years of age.
Unfortunately, there will always be teenagers who try to score booze. Fake IDs are nothing new. But it's vital to the health, longevity, and reputation of your business that you prevent the sale of alcohol to underaged shoppers by all means necessary. The penalties for violating this law are severe. An unintentional, first-time offense could mean sizable fines, jail time of up to 1 year, and liquor license revocation. In short, sell alcohol to a minor and you could lose your business.
Luckily, your Point-of-Sale system can serve as a strong line of defense against crafty minors who try to fool cashiers with fake IDs. A well-built POS system with age verification features and comprehensive employee permissions will also prevent dishonest cashiers from attempting to intentionally sell liquor to underaged shoppers.
That being said, your liquor store POS system should do more than prevent the wrongful sale of alcohol to minors. Here are the key liquor store Point-of-Sale features to look for:
- • Sales Tracking
- • Advanced Inventory Management
- • Age Verification Capabilities & Cashier Permissions
- • Pricing Options for Special Sales & Other Promotions
- • CRM Capabilities for Direct Marketing Purposes
Tracking sales is the primary purpose of any POS system. Generating a sales report should be immediate and easy, too. For liquor store retailers, tracking sales and reviewing sales reports needs to be straightforward so that you make wise business decisions and reorder inventory properly.
Advanced Inventory Management
Inventory tracking management should be at the core of any liquor store POS system. Accurately managing your inventory is imperative because fluctuating inventory quantities impact every area of your liquor business, from affecting your quarterly sales tax filings to triggering your automatic reorders with vendors. Be sure to go with a leading digital POS system that comes with comprehensive inventory tracking.
Age Verification Capabilities & Cashier Permissions
Your liquor store has a legal obligation to verify the age of every customer you sell to, as we explained in the prior section of this article. You will be held legally responsible if underage customers are able to buy alcohol products at your location, whether or not you're aware of this occurring. Be sure to purchase a POS system that comes with age verification features, including ID scanners.
Pricing Options for Special Sales & Other Promotions
Just because you opened a liquor store does not automatically mean that people will choose your brand instead of your competitors' stores. In order to succeed in today's economy, you will have to manage all kinds of promotions. Your Point-of-Sale system can help you collect valuable customer data via CRM features, which we'll elaborate on next, or via a built-in customer loyalty rewards program, which we'll cover later in this article. Either way, look for a POS system that will make launching promotional campaigns easy.
CRM Capabilities for Direct Marketing Purposes
Equally important to accurately tracking sales, managing inventory in real-time, and running successful in-store promotions is CRM, or customer relationship management. CRM refers to software technology that collects, organizes, and manages a company's customers. There's nothing more valuable to a liquor store owner than capturing the personalized sales histories of your customers and leveraging that for direct marketing promotions.
EFFECTIVE IN-STORE DIGITAL SIGNAGE SOLUTIONS
Liquor store owners who have made the switch from using static, printed signs to implementing digital signage at their locations will tell you that digital signage is superior, which is why we strongly recommend that you install a digital signage system at your liquor store.
In-store digital screens have the ability to alert customers to multiple ads, promotions, and incentives at once because the featured content can be programmed to rotate. In fact, considering that digital signage software includes scheduling and dayparting features, a single in-store digital screen can expose shoppers to dozens if not hundreds of ads throughout the course of the day, week, or month.
Depending on the digital signage system you go with, the software included will provide you with promotional graphics, templates, and other content-building tools to help you create all of the content you will ever need. This means that rather than spend a small fortune using a professional graphic designer, you can generate all the promotional graphics you want from the comfort of your own office or home at no cost to you.
Get the most out of your digital signage system by implementing these signage ideas:
- • Add Custom Streams of Scrolling Text that List Daily Deals
- • Feature Media Slideshows of Commercials, Ads, & Specials
- • Upload Full-Screen HD Flyers & Schedule Them to Rotate
- • Use Dayparting to Display Different Promotional Content at Different Hours of the Day
- • Sell Sponsorship Packages & Ad Spots to Your Vendors
Digital signage is a dependable way for liquor stores to implement a highly effective in-store method of advertising sales, showcasing new items, weekly specials, tasting events, and more.
A LOYALTY REWARDS PROGRAM THAT BOOSTS SALES
As the owner of a brand-new liquor store, one of the most important business goals to focus on is building up a loyal customer base. Even before the grand opening of your liquor store, you should have a strategy in place for incentivizing customer loyalty.
By offering promotional deals, discounts, and special sales, you can gain consumer attention. But to survive in today's market, you'll need to do more than gain consumer attention. You'll need to retain customers, and launching a customer loyalty rewards program can help.
As we mentioned earlier in this article, it's a good idea to look for a Point-of-Sale system that comes with a built-in loyalty rewards program. Loyalty programs enable liquor stores to promote members-only deals, discounts, and specials, which accomplishes two important goals. It attracts customers to join the program and it encourages program members to shop more frequently and spend more when they shop.
Look for a POS system that includes a customer loyalty rewards program or purchase a customer loyalty program that's compatible with your POS. Either way, make sure that the customer loyalty rewards program includes capabilities that allow you to:
- • Reward Customers with a Straightforward Points-Earning System that Never Feels Like a Hassle
- • Create Your Own Promotional Campaigns & Offer Deals, Discounts, and Freebies to Drive Sales & Generate a Loyal Customer Base
- • Designate Your Loyalty Campaign as Points Per Item or Dollars Per Item
- • Whitelist Specific Brands that are Eligible for Earning Points & Blacklist Items that Aren’t
That wraps up our 5 tips for opening your liquor store. Are you ready to start planning the grand opening of your liquor store? FTx POS offers the best Point-of-Sale solution for liquor stores. Our POS system comes with built-in CRM and a customer loyalty rewards program to help you retain customers and boost sales. Take your liquor store decor to the next level with FTx Digital Signage, an advanced digital signage system that allows users to customize promotions, schedule & daypart content, and engage in-store shoppers. Contact us for a demo or to learn more about our retail business solutions.