The reason why they look at the location is to ensure, that the property is properly zoned for such a business and to see if there were any other problems, with the liquor license at this location.
Next, you want to take photographs of the locations itself. This will be included with the application that you are submitting to the Department of Consumer Affairs. In general, the more pictures that you can supply of the interior and exterior of the property, the more it will help to provide a complete picture. This is important, because it will show that you are trying to be as transparent as possible, increasing your chance of being approved.
Once this is complete, you want to create a layout of what the location will look like, once it is open for business. This means that you must include details and sketches, showing areas where alcohol will be served as well as stored. The more detailed of picture you can provide, the quicker the application process will be, as this will provide a clear picture of what the business will look like once it is open.
The fourth step is to file the application. This means that you must know what kind of liquor license you will be applying for, as there are different licenses depending upon the business and what kind of products you will be selling. The most logical license for the liquor store would be: the package store permit. This will allow the business to be able, to sell a variety of beers and liquors.
The fifth step is the period of public comment. This is when various notices will be posted in the community and in the newspaper, announcing that a business has applied for a liquor license. There will be a period of public debate and comment. If there are any kinds of objections that are received, this will be taken into account during the application process.
The sixth step is to submit to a criminal background check. This where there will be a thorough investigation of all names listed on the application. During this part of the process, it is important to disclose any kind of convictions or tickets (no matter how small). The reason why is because any kind of ticket, including parking tickets, are considered to be a conviction. Therefore, anything that was not disclosed could slow the application or may result in an outright denial.
Once the license has been approved, you must go to the city government where the business will be located and file your applications with the city clerk's office. Once this is complete, the business will be able to begin selling alcohol directly to the general public.
What the above steps highlight is: the overall formalities and regulations surrounding the application process can be stringent. Despite this fact, the best way to ensure that everything runs smoothly is to provide more than enough information to the Department of Consumer Affairs. This will ensure that you are being open and transparent with them, which help to speed up the approval process. However, it is also important to note that any kind of information that is not included on the application, which could be relevant, will slow the process down considerably. This is why it is so important to be as transparent as possible.
Aside from: the regulatory issues, the location and the business plan, there are whole host of other factors that must be considered. Some of the most notable would include: the financials, equipment, vendors, employees and operations. There are a number of different financial aspects of the liquor store that must be considered such as: gross profit margins of between 24% to 28%, the total expenses for rent should be no more than 7% of the revenues, the products mix should have 70% liquor with 40% wine, labor cost should be 5% to 7% of the total revenues, the net profit should be from 8% to 12% a year and the total inventory in the store should turn over about ten times per year.
This is significant, because these are industry standards that can be applied to the liquor store. Where, this information helps to provide, basic guidelines for: determining what are normal rates of growth for the average store.
There will be the obvious expenses of purchasing equipment such as: refrigerators, furniture, computers, closed circuit televisions, surveillance cameras and alarms / monitoring systems. Any kind of equipment that is purchased would need to have a receipt and be evaluated for any kind of possible defects. . Another aspect that must be considered is if the equipment will be purchased or leased. Where, leased equipment will involve less upfront expense, but will have a consistent monthly cost. While purchased equipment could require a large upfront capital investment. This cost can be defrayed by purchasing used or rebuilt equipment. This is important, because how the equipment will be paid for and what kinds of equipment are selected, will determine how successful a business will be. This is because refrigerators and technology will help to ensure that the business will provide a superior product, quicker to customers. While the options to purchase or lease the equipment, will have an impact on the monthly expense and the upfront costs for starting the business.
The vendors and whole sellers will determine how successful the business will be over the short- and long-term. This is because the discounts and availability of different products will determine, if a business will be able to build a unique rapport with customers. One area you want to pay particular attention to is: if vending agreements can be easily transferable and the reputation of the vendor.
This is important, because the overall pricing structure that is negotiated and how quickly you can be resupplied; will ensure that you are always able to bring customers the products they demand.
Employees are major factor that can have an effect upon the financials of the business. This is because they play a key role in helping to maintain control of the inventory and cash that is received for many purchases. Evidence of this can be seen with a report from the U.S. Department of Commerce, which found 75% of employees will steal from their employer at least once.
In the case of a liquor store, the different products and large amounts of cash, highlight how some kind of procedures must be in place to prevent these kinds of incidents. One way to account for this is to have increased amounts of surveillance cameras, at area in the store where employee theft would be at its highest such as: behind the counter or in the storage room.
The operations of the business, is when you are figuring out how the store will function smoothly. This would include everything from selecting a credit card processing company to determine the hours of operation. This is significant, because once the business is open; a workable plan will help to ensure that confusion is avoided as much as possible. Once this take place, it will help to establish an effective procedure for running the operation, ensuring that it generates a continuous profit.
What all of this shows, is at the time you are working on the license you must be considering the factors of: the financials, equipment, vendors, employees and operations. These are important, because they will create a foundation as to how the business will: operate, identify benchmarks as far as profitability is concerned, help to determine what equipment is necessary, establish employee policies / procedures and negotiate with vendors. These different elements are important, because they establish how the business will address customer needs and maintain profitability, two elements that are necessary for achieving profitability goals.
Start Up Costs
The start up costs for opening a liquor store will vary. However, there will be a considerable investment in upfront capital to open the business. In general, the start up costs for a liquor store can range from: $150,000.00 to $500,000.00. The biggest costs that must be accounted for would be inventory, purchasing equipment such as cash registers / refrigerators and employee salaries. Inventory would be the biggest costs, accounting for at least a $100,000.00 up front investment. The equipment could costs could average in the range of: $6,000.00 to $10,000.00. Employee salaries would be between: $30,000.00 to $80,000.00 per year. It is also important to note, it is advisable to have large portion of cash liquid.
This will help the business to be able to resupply and make adjustments to changes in customer demographics or external factors that could affect the business. Over the course of time, this will help to improve the financial viability of business, by providing a margin of safety against unexpected events or challenges that may occur.
Issues the Location will face once it is Operational