Business Plan on "Business Plan for a Liquor Store"

Business Plan 19 pages (6860 words) Sources: 7

[EXCERPT] . . . .

Business Plan for Liquor Store

One of the more popular businesses to open is a liquor store. This is because the various products that are being sold are always in demand, as a wide range of customers will seek them out (regardless of the economic conditions). Evidence of this can be seen with a study, which found that 63% of Americans drink some form of alcohol on a regular basis. Out of this number 39% of respondents said they preferred to drink wine, while 36% said that beer was their drink of choice.

In either case, these statistics highlights how the underlying demand for alcohol related products remain steady, regardless of changes in tastes or the underlying economic cycle. However, there are a number of regulatory challenges that must be overcome to open and maintain such a business. This means, that the owner and possible investors must have a solid plan in place, to carefully determine what steps need to be taken, to successfully open and then maintain the operation for years to come. The problem that some liquor stores and other businesses that sell alcohol related products have; is that the high amount of regulation can bring about increased scrutiny from law enforcement. Especially, if there are reports of the store selling alcohol to minors or there are a number of calls to police about possible disturbances. These two factors will cause law enforcement and the Connecticut Liquor Control Commission to become concerned. When this happens, it means that the odds increase dramatically, that viability of the business could be affected by such incidents. A good example of this happened recently with Gag Jr.'s Liquor Store in New Haven. Where, they were caught selling to a minor, for the first time in its thirty years of operation.

This is significant, because it shows the constant challenges that are faced from the point of opening and maintaining the liquor store requires constant vigilance. As a result, prior to opening any kind of liquor store in Connecticut requires: creating a plan that will help address the obvious economic challenges of opening and starting the business. At the same time, you must account for increased amounts of regulation and creating strategies to mitigate these effects as much as possible. To achieve this objective requires looking at: what type of products will be sold in the store, possible locations, the laws for obtaining a liquor license, other issues, start up costs and examining issues that the location will face when it is operational. Once this takes place, a comparison will be conducted by examining the start up costs and regulations to purchasing an established business. Together, these different elements will provide the greatest insights, as to how a liquor store can be created and successfully maintained in Connecticut.

What Types of Products will be sold at the Store?

The process of opening any kind of liquor store will involve a maze of regulations that must be navigated. However, before going over any kind of regulations several different preliminary steps must be completed first to include: writing the business plan. This is important, because this is where you will determine what kind of liquor store that you will be opening. Where, depending upon: the type of products that are going to be sold, the type of license and the location / community are important factors. For example, two different kinds of licenses that an entity may consider would be: package store permit and a grocery store beer permit. This distinction is important, because on the license it will allow a business to sell beer, while another entity is allowed: to sell beer and liquor.

This is because each business has a different liquor license that allows them to sell certain kinds of alcohol. As a result, it is imperative that you decide what kind of products will be sold at the store. This will take place, when you are creating the business plan. During this process, you want to determine: how to market the store, estimated annual costs, possible strategies to ensure compliance with regulatory issues, estimate the total start up costs, additional working capital during the first year and determine how you can be able to turn a profit during the first six months of operation. This is significant, because this is foundation of the business that will help to focus: on how the store will be organized, what possible challenges could be faced in the future and how they can be mitigated. Once this is complete, you will be able to focus the business on achieving the specific goals, stated in the business plan.

Possible Locations

Next, you want to determine possible locations for the business. During this process you would need to consider a number of different factors to include: possible cliental, the proximity to high traffic areas and convenience. When examining possible cliental, you would need to look at what products are being sold and then compare it with the community that you are thinking about opening the store in. This is important, because depending upon the community various products may or may not be a big success.

For example, in some communities, those liquor stores that offer a wide variety of expensive beers and wines could be more popular with higher income cliental. As these are considered to be more expensive products, that are being purchased by those who have more culture and want an alcohol beverage to reflect these tastes. While in other communities, such as the lower income areas, a liquor store would not need to carry a wide assortment of expensive beers and wines. Instead, there would be more of an emphasis on selling cheap beer, wine and liquor to the community. Obviously, this is because the income levels are lower, which would require a different focus, on the overall product mix sold at the location. This is important, because depending upon the location of the business; the product mix will depend upon the tastes of consumers and income of the community.

Next, you want to examine how close a location will be to high traffic areas. In general, the closer the location is to areas where there is high visibility, means that the overall popularity of the business will increase.

This is because, those locations that are on busy streets or major arteries through the city, will receive additional exposure from being located in these areas. Over the course of time, this will cause the total amount of walk in traffic to increase and it will help the business to more quickly establish loyal cliental.

A third area to consider when looking for a location is convenience. This is an important factor, because most people are willing to pay more, to purchase what they are looking for close by. In the case of a liquor store, this means that you must consider those locations that would be considered to be convenient.

For example, a convenient location for many college students would be: a liquor store that is located within close proximity to the campus. The reason why this is important is: those owners who can place their stores at locations close to major areas of interest (such as colleges) will make shopping more convenient for these people. As a result, the overall long-term profits will be higher, because of the convince of purchasing from the location will instinctively cause someone to become lazy. At which point, they will purchase what they need form the closest location, even though it may be more expensive.

What all of this shows, is that some kind of common sense must be applied when searching for a location. Where, you want to have the store in a place that it can easily be seen, while at the same time making sure that it addressing specific tastes of the community and it offers convenience. If these three criteria can be met when selecting a location, the odd increase dramatically that the business will be able to experience high demand for its products. This will cause the overall profitability of the business, to increase over the short- and long-term.

Laws for Obtaining a Liquor License

In Connecticut, the state maintains strict control over the sale of alcohol. This means that prior to opening for the business; a liquor license must be obtained through the state. Where, licensing and enforcement fall under the authority the Department of Consumer Protection. However, various investigations and enforcement actions are conducted by: the Connecticut Liquor Control Commission.

This means that all applicants who are planning on opening any kind of establishment must follow certain procedures. To include: obtaining a location, providing photographs of the location, provide a layout of the establishment, file the application, wait for public comment, undergo a criminal background investigation and file the license with the city clerk's office.

The first thing that you must have before applying for a liquor license is: the location for the business itself. This is because the Department… READ MORE

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