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With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

Liquor Store SWOT Analysis

 

Strengths

 

In good times and in bad times, people will always want liquor, beer, and wine. In fact, during times of economic recession - sales of alcoholic beverage products tend to improve. The gross margins generated by liquor stores is moderate. Usually, a 20% to 30% gross profit is achieved on each sale. Specialty alcohol products (like vintage wines) tend to carry a much higher profit margin. The barriers to entry for a new liquor store is moderate. Generally, the startup costs for a liquor store range from $50,000 to $250,000 depending on the size and location of the business. One of the primary strengths for a liquor store is that financing can be easily obtained for inventory purchases. Banks and financing companies love to place capital with liquor store and package store businesses.


Weaknesses

 

Liquor stores are always easily found in most cities and towns (with the exception of dry counties). As such, when sourcing a new location for a liquor store - an entrepreneur needs to make sure that competitive issues are kept to a minimum. Some entrepreneurs, rather than starting a new business, will acquire one that is already in operation to deal with this issue. People are often very loyal to the liquor, wine, or beer store that they use.

 

Opportunities

 

New locations are always the best method for expanding a liquor store company's operations. However, there are substantial risks for establishing multiple locations as discussed above. One of the other ways that liquor stores expand their revenues is by offering wine basket and beer-of-the-month club services. These types of services generate highly recurring services for liquor stores, which in turn boosts the valuations of these businesses.  In some states, the online sale of liquor products is permitted. This can be another strong avenue of growth.

 

Threats


At this time, there are no known threats that would change the way that a liquor store operates. The only ongoing threat related to a liquor stores' operations are ongoing competitive issues. The best way to address this critical operating risk is to have a very well developed business plan.


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