How Much Does It Cost to Open a Liquor Store?

Do you want to start a liquor store business and want to know the cost? If YES, here is a cost breakdown for opening a liquor store and the profit margin/ROI.

A liquor store is a retail shop that that is licensed to sell prepackaged alcoholic beverages usually in bottles to customers who are likely to take them home or elsewhere to consume. It is important to note that State regulations vary widely. Most states in the united states of America have laws that clearly define which alcoholic beverages must be sold in specialty liquor stores and that which may be sold in other venues.

The liquor, beer and wine industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can chose to start on a small scale in a street corner like the average mom and pop business or you can chose to start on a large scale with several outlets in key cities.

Estimated Cost Breakdown to Open a Liquor Retail Shop

When it comes to starting a liquor retailing store, the major areas that you should look towards spending the bulk of your cash is in renting or leasing a standard store facility. These are the key areas where you are expected to spend your startup capital;

1. The Total Fee for Registering the Business in the United States of America – $750.
2. Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
3. Marketing promotion expenses for the grand opening of the liquor store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580
4. The cost for hiring a Business Consultant (Including helping your write a business plan) – $2,500.
5. Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
6. The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $35,600.
7. The cost for shop remodeling (construction of racks and shelves) – $20,000.
8. Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
9. Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
10. The cost for Start-up inventory (stocking with a wide range of liquors, wines, beers, tobaccos et al) – $35,000
11. The cost for the purchase of storage hardware (bins, rack, shelves, food case) – $3,720
12. The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
13. The cost for serving area equipment (plates, ash trays, glasses, flatware) – $3,000
14. The cost for store equipment (cash register, security, ventilation, signage) – $13,750
15. The cost of purchase and installation of CCTVs – $2,000
16. The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
17. The cost of launching a Website – $600
18. The cost for organizing opening party – $2,500
19. Miscellaneous – $2,000

From the rough estimate as listed above, you would need a minimum of one hundred and eighty – four thousand seven hundred USD ($184,700) to establish a medium – scale but standard liquor retail shop business in any city in the United States of America.

Please note that this amount includes the salaries of all the staff for the first three months of operation. These are some of the products that you will find in an ideal liquor retail store;

• Liquors
• Beers (Bud Light, Coors Light, Miller Lite, Budweiser, Michelob Ultra-Light, Natural Light, Busch Light, Bush, Redds Apple Ale, Sierra Nevada Pale Ale, Keystone Light, Pabst Blue Ribbon, Bud Light Lime, Bud Light Platinum Lager et al)
• Locally Crafted Beers (Pale Beers, Amber Beers, Dark Beers, Hebrew Beers, Gluten Free, Organic Brews, Cider et al)
• Wines
• Distilled spirits
• Martinis
• Non – alcoholic beverages
• Tobacco

Factors Influence the Cost of Opening a Liquor Store

1. Your Choice of Location

One of the major factors that can influence the cost of opening a liquor store is your choice of location. The truth is that your rent or lease, labor, operational costs, and source of supplies are location dependent.

In essence, the cost of opening a liquor store can vary based on the region, city, neighborhood, and even specific street or building. As expected, prime locations, that is locations with high foot traffic and visibility usually come with higher rent or property prices.

2. The Size and Layout of Your Liquor Store

Another major factor that can influence the cost of opening a liquor store is the size and layout of the liquor store. Trust me, the size and layout of your liquor store will affect the overall cost of opening the business. As expected, a liquor store that operates from larger spaces will generally have higher rent or purchase costs, and conversely, smaller spaces will generally have lower rent or purchase costs.

In addition, the layout and design of the space, including any necessary renovations or interior decoration, will attract more costs and of course, can significantly impact the overall cost of opening your liquor store business.

3. The Cost of Purchasing Your Supplies and Equipment

Liquor stores require certain equipment and supplies such as refrigeration units, countertops, storage shelves, seating furniture, POS systems, and more.

Another influence that you might face is the quality, brand, and quantity of equipment you will purchase. In addition, the variety and quality of ingredients you plan to offer on your menu also play a great role in influencing the costs of opening your liquor store. For instance, organic or locally sourced produce tends to be pricey compared to conventional options.

4. The Cost of Licensing and Permits

If you are planning to open a liquor store in the United States of America, you will be required to apply for certain licenses and permits needed to legally operate the business.

Please note that depending on your location, there may also be specific regulations and requirements related to health inspections, signage, and accessibility. Ensuring compliance with these regulations may involve additional costs. Trust me, the cost of obtaining these licenses, and permits can be significant and of course, they vary depending on your location and the local regulations in the city where you want to open your liquor store.

5. The Cost of Hiring and Training Your Employees

Another major cost that can influence the overall costs of opening a liquor store business is the cost of hiring and training your employees. The truth is that you will need employees to run your liquor store business, and for you to get them up to speed, or to align with your business goal, mission, and vision, then you would need to train them.

In essence, payroll expenses for hiring and training staff members should be taken into account if you are considering opening a liquor store business.

6. The Cost of Marketing and Advertising

If you are planning to start a new business, then you must create a robust budget for marketing and advertising. Interestingly, there is no template when it comes to how the owner of a liquor store may decide to market and advertise his or her liquor store.

This is why an average entrepreneur who wants to open a liquor store would naturally opt for a low-budget form of advertising. By low budget, we mean leveraging social media platforms that are almost free to reach out to their target market or to print and distribute handbills to people in and around the location where their liquor store is located.

7. Utilities and Operational Expenses

Yet another thing that influences the cost of opening a liquor store business is the expenses on utilities and operations. If you plan to open a liquor store business, make sure you budget for ongoing expenses such as electricity, water, and gas, as well as recurring operational costs like insurance, cleaning services, waste disposal, and maintenance.

It is also necessary to set aside a contingency fund for unexpected expenses. Do also note that this cost may influence the overall cost of opening your liquor store business.

In Conclusion,

Although all the factors listed above have the capacity to influence the overall cost of opening a liquor store, there are other factors not listed above that could have the potential to alter the cost of opening the store. This for instance boils down to your choice of furnishing and of course, the types and brands of liquors and spirits you want to sell in your liquor store.

Furthermore, the additional products and services you want to offer may also influence the overall cost of opening your liquor store.

Please note that this is a rough estimate and we usually advise our readers who are interested in opening a liquor retail shop to go to the market or directly contact wholesalers and suppliers of the types of liquors and drinks they would need in the shop in order to get the real time prices of these items.

The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.