8 Reasons to Invest in a Liquor Store

So you want to buy a liquor store? We’ve got you.

Liquor stores are very easy to run. They essentially run themselves if you have great employees you can depend on. Investing in this industry is possibly one of the easiest ways to make great money for passive ownership.

1. People Drink When They Are Happy, When They Are Sad, and When They Are Thirsty; It’s Recession Proof

How many times have you heard your buddy ask you, “Hey what do you want from the liquor store?” The answer is probably countless times, but liquor is just one of those necessities per say. People are always drinking. Whether it is at the house, BBQ, out to dinner, etc. Some people need this stuff, and where are they going to get it? Oh that’s right, the neighborhood liquor store that YOU own!

2. Basic Retail Concept

There is absolutely no algorithm needed here to make your store pop. It doesn’t matter if you’re a retail whiz or not. Throw the product on the shelves and people will buy it regardless of how it is represented. Although, you should organize it by wine, beer, liquor. It just makes it a bit more seamless transaction with the customer.

3. Prices are Relatively Fixed

Whether you keep your margins inside the store the same, or you choose to increase them; people will still buy from you! You will establish a loyal clientele base and it won’t matter to them how much they pay. All they want is your liquor! Keeping these prices relatively the same will keep repeat customers. It is such a simple business, why didn’t you invest earlier?

4. High Margin Business

You buy your liquor, beer, and wine at a certain cost. Now you hike up the price very minimal. Liquor stores average a margin of around 25-27%. This is a great number to charge on top of your cost. This will allow you to make tons of money, but also keep customer traffic steady inside your store. You can charge a relatively inexpensive amount, but still increase your cash flow exponentially.

5. Few Employees Required

One of the biggest worries for store owners is employees. Here in the liquor business, you do not have to worry! Depending on the size of the store, the most you will ever need is 3-6 employees. 3 being a good amount for a small store, and 6 being for a larger store. As time moves on, you will figure out a good number of employees needed to successfully run the store, while keeping labor costs to a minimum.

6. Inventory —> Tax Write Off

You now own your own business. So you get yourself a business credit card and put all your expenses on there. Guess what? It is all a tax write off. You buy your inventory on it. This will be one of your biggest expenses to the business, but one of your greatest assets as well. You can pretty much write everything off. The utilities, bank charges, insurance, new coolers, inventory, etc.

7. Cash Business with Low Barriers of Entry

Is there anything better than cash? Most people would say no. Majority of your business will be cash. Owning a liquor store is a very lucrative business. Lets be honest, it does cost a bit of money to buy a store depending on the size, but they are SIMPLE to run. Barriers of entry are extremely low! There isn’t a huge start up cost because you have the inventory already, and you have an established customer base. You can get into a store with absolutely no liquor experience and run it extremely well and profitable. We see it done here all the time.

8. Did we Mention People Like to Drink?

Oh, I am sure we did, but look at it exactly from that perspective. People drink all the time! Whether they do it occasionally with that expensive bottle of whiskey, or the repeat customer who buys a case of Bud Light. This business constantly increases in sales, which means more money in your pocket. People will never get tired of beer, liquor, and wine. As stated before, its a necessity for our society, as we see it everyday.

 

Don’t wait, get in touch with us now! We sell more liquor stores than any other brokerage firm in Colorado! We have the knowledge and expertise to help guide you into your next business endeavor. Contact us for more information, or see our liquor stores we have available here.

8 Mistakes to avoid when Starting an ATM business

Don’t Make These Mistakes!

You made the decision to start your own ATM business. Now you must keep it operating smoothly and profitably. Here are the 8 mistakes you must avoid:

1. Overestimate cash flow

There are many sources online which tell you that you can make $500 per month or more from each ATM. Most of the time, these estimates are much too high. My recommendation is to do your homework and count on $250-$300 of income on the higher side. $150-$200 on the low side is a safe bet. Make some calls, talk to merchants and be conservative with your income estimates

2. Purchase used equipment

Buying used equipment can sound appealing but right now you need to be cautious of what you buy. With EMV requirements right around the corner you should invest in new equipment when starting an ATM business. Pay for new equipment and you get a 1-year warranty on parts and set your business up for success. If you buy old equipment, you could run into many repairs and potentially lose locations due to out of service machines.

3. Underestimating capital requirements

You will need cash to load the machines on a rotating basis. You should count on at least $2000 per week per terminal. If you plan on deploying 10 terminals you will need at least $20k of working capital to service the machines if not more.

4. Overlook EMV

Do some research on EMV and make sure you know what makes/models can be upgraded and what the costs to upgrade are. This will save you headaches down the road when EMV is implemented.

5. Not setting up a bank relationship first

With operation Chokepoint and other issues in play, you should contact your bank or locally recommended banks and make sure they can support the needs of your ATM business. Some banks will not support the ATM business at this time so make sure yours does.

6. Set your margins too low

Be careful when negotiating your surcharge fees and your commissions to your merchants. Don’t give away too much of your margin. You need to know the market and understand what is expected but at the same time not give away too much. If you set your margins correctly out of the gate you will be much happier with the income in the long run.

7. Not having signed contracts

If you plan to sell your locations or defend your location, you should make every effort to get signed agreements with all of your merchants. I have seen many operators who run their ATM business without contracts and when its time to sell, the valuation is eroded. You will also have nothing to stand behind if the merchants decide to have your ATM removed or allow a competitor to come in. Bottom line is, get signed contracts.

8. Poor geography

Make sure you don’t spread your locations too far from your home base or each other. Choose a territory wisely and do your best to stick with it. The further out your locations are, the more your time and service costs go up. A tightly knit route of machines is far more appealing to buyers as well.

Contact us to start your own ATM route today! You can view ATM listings here. If you have any further questions, please feel free to contact us.