You’ve probably heard about the famed Gary Vaynerchuk, a serial entrepreneur who took his family’s small liquor store and built a $60 million empire. He was a wine critic by profession, but decided that it was time to make big bucks from his expertise, and he succeeded.
After hearing that story, you might have thought it’s time for you to enter the business for your benefit. Alcohol can be a profitable industry with great rewards as long as you do your research.
You have many options for getting into the industry. You could have a storefront, bar, or restaurant, or you could enter wholesaling, warehousing, production, or distribution. No matter what you choose, here are a few things you should know before jumping in.
A business degree helps.
Being successful in the liquor industry requires knowledge of the inner workings of a business, something that takes time and experience to curate. You need a solid business plan with a path for funding, marketing campaigns, accounting services, employee relations, and more.
You can learn a great deal about running a business while on the job. However, you’ll get a quicker handle on it if you earn a business degree. This formal education will prepare you for all sorts of scenarios, including starting your business and growing it successfully.
If you’ve already begun your business, you probably don’t want to close it down so that you can go back to school. Thankfully, you don’t have to. You can find hundreds of accredited online degree programs that will enable you to get your degree while you’re working hard on your business. Learning something new and applying it directly to your career is key.
Get your license and make sure you’re legal.
Unfortunately, getting started in the liquor industry can be a long, drawn-out process. You want to jump right in and work with customers, but you have to make your way through a tall stack of applications and permits first.
Getting the right licensing and permits is vital to a successful business. The requirements and costs for all this paperwork vary by state. Cities and counties also have their own rules and laws that you have to follow if you want to sell alcohol.
The best way to find out what paperwork you need to fill out is to visit the Alcohol and Tobacco Trade and Tax Bureau (TTB) website. The agency enforces the laws relating to liquor sales and distribution, and it will have all the information you need to begin applying for your liquor licenses.
Consider hiring a business attorney to help you sort out the legalities and get it right the first time. An attorney can also help you set up a business structure. With all the work you’ve put into this endeavor, you don’t want to risk everything being taken away because you don’t have the right paperwork.
You’ll need good vendors to supply product.
You have a lot of control over your success in the alcohol industry. Your business knowledge, patience, perseverance, and expertise will carry you a long way. However, you can’t control everything. You have to rely on great vendors to supply you with product.
Finding good vendors in the liquor industry isn’t always easy. Start by finding the vendors in the area. If you’re in central California, Google search “Santa Rosa and beverage distributor” to get a list of vendors in your area.
Read reviews and get recommendations from liquor businesses in the area. Once you’ve narrowed your list to a few good candidates, call them for quotes on wholesale product. Negotiate to get a price in your favor. You’ll get a strong sense of their customer service policies as well, which can make a big difference in your day-to-day interactions.
Once you’ve settled on a vendor, you don’t have to remain with that choice forever. Continually shopping around is the best way to keep rates competitive. When you find a better price, let your vendor know and see whether they’ll make a change.
An investment in good equipment goes a long way.
Whether you’re acting as a liquor wholesaler or opening a storefront, you’ll need a warehouse or stockroom to store your product. To keep things running smoothly and your product fresh, you’ll need to invest in quality equipment.
Start with shelving. Most liquor stores or warehouses require locking display cases for more valuable wines and spirits. Refrigerators and freezers are also important for keeping your alcohol in ideal condition for your customers. You’ll also need a temperature-control regulator to avoid unsuitable temperatures. Alcohol doesn’t do well when it gets too hot or too cold.
Warehousing equipment is also a must. You’ll need a forklift for carrying pallets and maintaining order in the storeroom. Check out a forklift dealer in New Jersey or whatever state you live in so you can price this vital piece of equipment.
Remember that you’ll get out of your equipment what you put into it. You don’t need top-of-the-line equipment, but don’t base your decisions on cost alone. Consider this an investment that will serve you well for years to come.
Be an expert in your field.
Gary Vaynerchuk couldn’t have gotten as far as he did with his business if it hadn’t been for his expertise in the wine industry. He knew what he was doing, and his customers could sense that. Consumers today are intelligent. They pay attention, and they know what they like.
Get experience in your field. Visit wineries and distilleries for tastings and experiences. Frequent bars and restaurants in your area to get a sense of what’s on the menu and what’s popular. Check out a profitable liquor storefront to learn what customers look for as they shop. Just Google search “liquor store Woodbridge, NJ,” or “bar and grill Philadelphia, PA,” to find licensed alcohol sellers in your area.
Prioritize your own education. Take courses and attend lectures that focus on the alcohol industry. Some courses that you might consider include explorations of the palate, wine pairing, cooking, and catering to customers.
Know the people you’ll be serving as well. Will your store or bar service the younger crowd that has only been drinking for a year or two? Or will you cater to the older, more conservative, and deep-pocketed suburban dwellers? This distinction and your ability to cater to their demands will tip the scales in your favor.
Once you’ve established expert status in your field, share that knowledge with others. Create bodies of knowledge such as videos, blog posts, and infographics to help others become connoisseurs in the industry. It’s an excellent way to market your business and add value to your customer base.
Success in the liquor industry takes careful planning and consideration, but it’s a great career. You’ll face entrepreneurial hurdles along the way, including cash flow problems, lack or organization, property damage, and loss. But if you’re prepared, you can weather the storm and come out on top.