Bridging the Way BayState Business Brokers blog

Tips on How to Buy a Liquor Store

by | Oct 4, 2011

Buying a liquor store can be a profitable and enjoyable experience. But, there are a few things to consider before you buy a liquor store.

  • Many buyers want to buy a liquor store because they have the expectation that liquor stores are unusually profitable and recession-How to buy a liquor storeproof. Like all other types of businesses, the sales of a liquor store can suffer when the economy does. Also, as a retail business, the profitability of the liquor store depends on the product margins and overall volume of the liquor store, as well as fixed costs such as rent, utilities and employee wages. Two liquor stores can have the same overall revenue figures but very different net incomes.
  • Liquor stores are best run by a full-time working owner. Running a liquor store absentee is difficult and leaves you exposed to theft, employee issues, and declining revenues. Most owners handle ordering, inventory, accounting/financials, employee management and some cash register duties in their liquor store. Some liquor store owners work an average of 60+ hours per week. Having a partner or family members who can work in the liquor store with you is always helpful and ensures you have staff that you can trust.
  • You will most likely never find the “perfect” liquor store and if you have that expectation, you could be looking forever. Many owners keep their liquor stores for 20+ years, especially if it is a good and profitable liquor store. Instead of looking for a liquor store in a particular town, look for a liquor store in an entire region to broaden your search.  Like any job, you should be open to relocating if you find a liquor store far from your home but with your desired criteria. Many liquor stores don’t have perfect financials, but try to do your due diligence in other ways.   If you can do so, use an observation period in the liquor store or traffic counts outside for due diligence. And don’t overlook a liquor store that does well but needs some cosmetic updates. Those are easy to do.

A liquor store can be a good business to buy, but you need to investigate it like any other business. And, there are ways to manage a liquor store better so it turns out to be a good business for you.



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