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How to Start a Tequila Business

A tequila business is a business that prepares and serves different flavors of tequila and other drinks. The Weber blue agave plant which grows in Mexico, is used to make the distilled drink known as tequila.

A central core known as the pina of the blue agave plant sprouts enormous spikes. The plant’s pina is the portion after the leaves are taken off, and that is what is used to manufacture tequila. Tequila sales on a global scale were estimated at $9.89 billion in 2021.

The market is anticipated to expand at a CAGR of 5.89 percent from 2022 to 2029, rising from USD 10.43 billion to USD 15.57 billion.

Steps on How to Start a Tequila Business

  1. Conduct Market Research

To be able to optimize revenue from this business, you would need a trustworthy market analysis. Creating a market-based research question that is in line with your overall business aim and objective should be the first step in the market research process for your tequila business.

In this regard, you should look for information that will help you grow your company, information that will give you trustworthy data and, of course, an idea of what your potential market will be looking for from a tequila business, as well as information to help you run your tequila business stress-free and, of course, information to help you grow the business to profitability.

a. Who is the Target Market for Tequila Business?
  • Socialites
  • Tourists
  • Every adult who resides in the location where you intend to sell your tequila drinks and cocktail.
b. Is Tequila Business a Profitable Business?

Yes, the Tequila business is a profitable business. In 2021, the size of the world tequila market was estimated at USD 9.89 billion. According to projections, the market will increase from USD 10.43 billion to USD 15.57 billion by 2029, growing at a CAGR of 5.89 percent over the forecast period.

c. Are There Existing Niches in the Industry?

Yes, there are existing niches when it comes to the tequila business, and they are;

  • Tequila bar
  • Tequila store
  • Tequila distillery
  • Tequila distribution company

So also, a tequila business may decide to specialize in a unique flavor such as;

  • Blanco
  • Reposado
  • Añejo
  • Extra añejo
  • Cristalino
d. Who are the Major Competitors?
  • Sherry-Lehmann Wine & Spirits
  • Total Wine & More
  • Old Town Tequila
  • Del Mesa Liquor
  • ReserveBar
  • AquaRiva
  • Agavero
  • Bandolero Tequila
  • Bribón
  • Cabo Wabo
  • Casa Del Sol
  • Casa Dragones
  • Don Angel
  • Don Fulano
  • Don Julio
  • El Toro Tequila
  • El Tequileno
  • The Butterfly Cannon
  • Tres Generaciones
  • Volcan de Mi Tierra.
e. Are There County or State Regulations or Zoning Laws for Tequila Business?

Yes, there are county or state regulations and zoning laws for Tequila businesses, and players in this industry are expected to work with the existing regulations governing such businesses in the county or state where their business is domiciled. It is illegal to sell tequila to people under 18 years.

f. Is There a Franchise for Tequila Business?

No, there are no franchise opportunities for Tequila businesses.

g. What Do You Need to Start a Tequila Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • Insurance
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Employees
  • Commercial Distillery and Bar Facility
  • Ingredients (blue agave plant, sugar juice, and Packaging Materials)
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a tequila business are;

Creative Tequila Business Name ideas

  • Frito© Tequila Bar, Inc.
  • El Niño® Tequila Bar, LLC
  • Raul Gómez© Tequila Distillery, Inc.
  • Drink Solutions® Tequila Store, Inc.
  • Drink King™ Tequila Bar, Inc.
  • Green Thirst™ Tequila Bar, LLC.
  • Lena Zone© Tequila Store, LLC
  • Drink Guys® Tequila Bar, Inc.
  • Solna Clennon© Tequila Bar, Inc.
  • Drink Life© Tequila Store, Inc.
  • Reemerges Spot® Tequila Bar, LLC
  • Charles McCalister® Tequila Distillery, LLC
  • Borjan Romario™ Tequila Bar, LLC
  • Creamy Taste© Tequila business, Inc.
  • Sun Rise® Tequila business, Inc.
  • Drinks and More™ Tequila and Liquor Store, Inc.
  • Drink Depot™ Tequila and Liquor Depot, Inc.
  • Lady Lincoln© Tequila Bar, Inc.
  • Chil Serve® Tequila Store, LLC
  • Falcao and Sons™ Tequila Store, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for the Tequila Business?

When it comes to the legal form of a Tequila business, an LLC is the one that the majority of participants in this industry choose. An LLC will require an EIN if it has any employees. The majority of newly formed single-member LLCs that are considered disregarded businesses must obtain an EIN.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Tequila Business?
  • General Business License
  • Zonal Permits
  • Signage Permit
  • Proof of ownership, proper identification, and vehicle license
  • Proof of district-issued food and drinks manager identification card
  • Depot, commissary, or service license
  • Copy of license for the service support facility and/or a recent inspection report.
d. What Type of Certification is Needed to start a Tequila Business?

You don’t need any certifications to start a tequila business.

e. What Documents are Needed to Open a Tequila Business?

These are some of the basic legal documents you are expected to have to legally run a tequila business in the United States of America;

  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval (For your distillery and bar/store)
  • Certificate of Incorporation
  • Drinks Handlers’ License
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

In most cases, you might not need to register for intellectual property protection or a trademark if you are thinking about starting a tequila business. This is true because the nature of the business allows you to successfully manage it without having any reason to sue anyone for using your intellectual property.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Tequila Business?

There are few factors that can influence the start-up cost of a tequila business; they include the size, niche idea, and the types and number of equipment. But generally speaking, it will cost between $50,000 and $250,000 to start a Tequila business.

b. What are the Costs Involved in Starting a Tequila Business
  • The total fee for registering the Business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $1,300.
  • Marketing promotion expenses for the grand opening of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for – $3,580.
  • The cost of hiring a business consultant including writing a business plan – $2,500.
  • Insurance (general liability, workers’ compensation, and property casualty) coverage – $2,400.
  • Other start-up expenses like stationery ($500) and phone and utility deposits ($2,500).
  • Operational cost for the first 3 months (salaries of employees, purchase of gas, payments of bills et al) – $60,000
  • The cost for start-up inventory (supply of tequila, ingredients, other drinks and packaging materials et al) – $5,000
  • The cost of storage hardware (bins, rack, shelves, food case) – $3,720
  • The cost for counter area equipment (sink, ice machine, etc.) – $5,500
  • The cost for store equipment (cash register, security, ventilation, signage) – $3,750
  • The cost for the purchase of furniture and gadgets (Computers, Printers, Telephones, TVs, Sound Systems, tables and chairs et al) – $10,000.
  • The cost of launching a website – $600
  • The cost of the opening party – $5,000
  • Miscellaneous – $5,000
c. What Factors Determine the Cost of Opening a Tequila Business?
  • The size of the tequila business
  • The choice of location
  • The required licenses and permits
  • The cost of hiring and paying a business consultant and attorney
  • The cost of branding, promotion, and marketing of the Tequila business
  • The cost of furnishing and equipping the Tequila business
  • The cost of insurance policy covers
  • The cost of registering the business
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost of the grand opening of the Tequila business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

In reality, creating a brand-new retail space is not required for your tequila business. This is true because the nature of the company allows you to rent or lease a shop or distillery facility.

e. What are the Ongoing Expenses of a Tequila Business?
  • Supply of tequila ingredients and serving materials
  • Gas
  • Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
  • Salaries of employees
  • Trucks maintenance
  • Insurance
  • Marketing costs
f. What is the Average Salary of your Staff?
  • Chief Operating Officer (Owner) – $38,000 Per Year
  • Manager – $30,000 Per Year
  • Tequila Makers – $26,500 Per Year
  • Attendants – $26,100 Per Year
  • Cleaners -$24,000 Per Year
g. How Do You Get Funding to Start a Tequila Business
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Pitching your business idea and applying for business grants and seed funding from, the government, donor organizations, and angel investors
  • Source for soft loans from your family members and your friends.
  1. Write a Business Plan

a. Executive Summary

El Niño® Tequila Bar, LLC is a licensed tequila and liquor bar business based in Las Vegas – Nevada, USA. We are a unique tequila brand because we do not just sell different flavors of tequila drinks, but we also sell our franchise. In our business, place major emphasis on the quality of the blue agave plant we use. We will get the organic fruits in bulk from trusted wholesale fruit suppliers who would give us the best quality.

b. Products and Service
  • Different flavors of tequila, cocktail, and liquor
  • Food and Snacks
c. Mission Statement

Our mission is to build a tequila business that will meet the needs of all our customers in the regions and cities where we will cover and also sell franchises all across the United States of America and Canada.

Vision Statement

Our vision is to become one of the preferred choices for individuals and organizations when it comes to tequila and cocktail drinks in Las Vegas, Nevada.

d. Goals and Objectives

The goals and objectives of a Tequila business are to prepare and serve healthy tequila and cocktail drinks to our patrons in a safe and friendly environment ideal for networking.

e. Organizational Structure
  • Chief Operating Officer (Owner)
  • Manager
  • Tequila Makers
  • Attendants
  • Cleaners

Marketing Plan

a. SWOT Analysis
  • Excellent operational history
  • Superb menu list
  • Experience and trained professionals.
  • Well-equipped shop facility.
  • Excellent customer testimonials.
  • Availability of different flavors of tequila and cocktail drinks.
  • The owner is new to large-scale marketing
  • Will need a loan to purchase the latest commercial tequila-making equipment
  • The owner is currently running the business solo
  • Lack of economies of scale.
  • Growing outdoor activities
  • Build upon existing clientele
  • Online market, new services, new technology, and of course the opening of new markets.
  • Increase in the number of tourists and visitors who would want to patronize our tequila and cocktail drinks.
  • Loans diminish profitability until they are paid off
  • The first year will be financially tight while we gain customers and pay off loans
  • Competition in the area could increase
  • Management of employees requires time, money, and effort
  • The regulatory department could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses.
b. How Do Tequila Businesses Make Money?

Tequila businesses make money by selling different flavors of tequila and cocktails, drinks and snacks et al.

c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards/Point of Sale Machines (POS Machines)
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
  • Payment via bank draft
d. Sales & Advertising Strategies
  • Introduce your tequila brand by sending introductory letters to residents, park managers, and other stakeholders in and around the city you intend to cover.
  • Open your tequila business with a party so as to capture the attention of residents who are our first targets
  • Engage in roadshows in targeted communities from time to time to promote your tequila business
  • Advertise your tequila business in community-based newspapers, local TV and radio stations
  • List our business and products on yellow pages ads (local directories)
  • Leverage the internet and mobile apps to promote your tequila business
  • Engage in direct marketing and sales
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Product/Service?

Generally, most tequila bars charge based on the type and quantity of the tequila sold and it could range from $10 to as high as $300. As a matter of fact, the price of Milagro Jalisco ranges from $21.99 to $299.99

b. How Much Profit Do Tequila Business Owners Make a Year?

It depends, but the available report shows that on average, a tequila business should net more than $70,000 per year assuming they have a steady clientele.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the tequila business
  • The location of the tequila business is covering
  • The management style of the tequila business
  • The business approach of the tequila business
  • The advertising and marketing strategies adopted by the tequila business.
  • The number of years the tequila business is in business
d. What is the Profit Margin of a Tequila Business Product/Service?

The profit margin of a tequila business is not fixed, but it could range from 25 percent to 55 percent.

e. What is the Sales Forecast?

Below is the sales forecast for a Tequila business. It is based on the location of the business and other factors as it relates to such startups in the United States;

  • First Fiscal Year: $320,000
  • Second Fiscal Year: $480,000
  • Third Fiscal Year: $550,000
  1. Set Up your Shop/Office

a. How Do You Choose a Perfect Location for your Tequila Business?
  • The demography of the location as it relates to people over 18 years
  • The demand for tequila drinks in the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of Tequila businesses, and cocktail outlets in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Open a Tequila business?
  • Los Angeles, California
  • Las Vegas Nevada
  • Miami Florida
  • Washington DC
  • New York City, New York
  • Dallas, Texas
  • Columbus, Ohio
  • Oklahoma City, Oklahoma
  • Chicago, Illinois
  • Boston, Massachusetts.
c. What Equipment is Needed to Operate a Tequila Business?

You should be prepared to purchase juice extractors, fruit press, deep freezer et al. So also, you will need computers (laptops), internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.

  1. Hire Employees

When it comes to hiring employees for a standard Tequila business, you should make plans to hire a competent chief executive officer (you can occupy this position), manager, tequila maker, attendants, and cleaners.

  1. Launch the Business Proper

In recent times, no tequila business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening party if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the tequila business, you will be able to officially inform people in your city that your tequila business is open for business.

a. What Makes a Tequila Business Successful?
  • Choose a good location, and brand of tequila to launch the business
  • Hire only competent, hardworking, and trustworthy staff
  • Throw a party before officially opening the tequila business
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your tequila business
  • Leverage all available online and offline platforms to promote your tequila business
b. What Happens During a Typical Day at a Tequila Business?
  • The business is open for the day’s work
  • The facility and equipment are cleaned and ready for business
  • Tequila and cocktail drinks are prepared
  • Customers’ requests are taken and they are attended to
  • Marketing/website upkeep
  • Supply ordering
  • Administrative duties
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Tequila Business?
  • Good cocktail-mixing skills
  • Customer services skills
  • Interpersonal skill
  • Good bookkeeping and accounting skills
  • Business management skills
  • Work experience in a cocktail shop or drinks industry
  • Experience in managing people
  • Experience in business administration
  • Experience in handling relevant retail and supply software.