Starting a liquor brand can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful liquor brand.
Importantly, a critical step in starting a liquor brand is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Liquor Brand:
- Choose the Name for Your Liquor Brand
- Develop Your Liquor Brand Business Plan
- Choose the Legal Structure for Your Liquor Brand
- Secure Startup Funding for Your Liquor Brand (If Needed)
- Secure a Location for Your Business
- Register Your Liquor Brand with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Liquor Brand
- Buy or Lease the Right Liquor Brand Equipment
- Develop Your Liquor Brand Marketing Materials
- Purchase and Setup the Software Needed to Run Your Liquor Brand
- Open for Business
1. Choose the Name for Your Liquor Brand
The first step to starting your own liquor brand is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your liquor brand:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your liquor brand.
2. Develop Your Liquor Brand Business Plan
One of the most important steps in starting a liquor brand is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your liquor brand.
- Company Overview – this section tells the reader about the history of your liquor brand and what type of liquor brand you operate. For example, are you a vodka, rum, whiskey, tequila, gin, or brandy brand?
- Industry Analysis – here you will document key information about the alcohol beverage industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your solid marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your liquor brand? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your liquor brand make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Liquor Brand
Next you need to choose a legal structure for your liquor brand and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the liquor brand and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a liquor brand together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the brand owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a liquor brand include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a liquor brand is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your liquor brand, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Liquor Brand (If Needed)
In developing your liquor brand business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a liquor brand to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a liquor brand that they believe has high potential for growth.
5. Secure a Location for Your Business
There are a few things you need to take into account when looking for a physical location for your liquor brand. You’ll want to find a place that is accessible and visible to your target market, and that has the right zoning laws for liquor sales. You’ll also need to make sure that you have the financial resources to purchase or lease a property in the desired location.
6. Register Your Liquor Brand with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your liquor brand’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your liquor brand to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
There are a number of licenses and permits you will need in order to start a liquor brand. The most important license is a manufacturing license from the Alcohol and Tobacco Tax and Trade Bureau (TTB), which allows you to produce alcoholic beverages. You will also need to get a license from the state in which you plan to do business, as well as a permit to sell alcohol. There may be other licenses and permits required depending on your location.
10. Get Business Insurance for Your Liquor Brand
There are various types of insurance that are necessary to operate a liquor brand.
Some business insurance policies you should consider for your liquor brand include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Liquor Brand Equipment
To start a liquor brand, you will need some distillery equipment, bottles, and labels. You may also want to invest in some marketing materials to help get your brand started.
12. Develop Your Liquor Brand Marketing Materials
Marketing materials will be required to attract and retain customers to your liquor brand.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your liquor brand. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your new brand.
- Website: Likewise, a professional liquor brand website provides potential customers with information about the products you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your liquor brand.
13. Purchase and Setup the Software Needed to Run Your Liquor Brand
To run a liquor brand, you need a point-of-sale (POS) system to manage your inventory, purchasing, and sales. You also need a customer relationship management (CRM) system to keep track of customers, and marketing software to help you advertise your product.
14. Open for Business
You are now ready to open your liquor brand. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Liquor Brand FAQs
Is it hard to start a liquor brand?
No, it is not hard to start a liquor brand. With proper planning and preparation, starting a liquor brand can be successful. Make sure that you also have a good understanding and knowledge of the liquor industry.
How can I start a liquor brand with no experience?
There are a few things you can do in order to start a liquor brand with no experience. You can first research the industry and learn as much as possible about it. This will help you understand the basics of how the industry works, what products are popular, and what marketing strategy is most successful. You can also look for experienced professionals in the industry who can help guide you.
What type of liquor brand is most profitable?
The most popular and, therefore, the most profitable liquor is vodka. However, profitability can vary depending on the quality of the liquor, the location of the business, and the preferences of the customers in the area.
How much does it cost to start a liquor brand?
It can cost anywhere from $10,000 to $100,000 to start a liquor brand. The amount of money you'll need to start a liquor brand depends on the type of liquor you want to produce, the distribution method you choose, and how much marketing you do.
What are the ongoing expenses for a liquor brand?
There are a few main expenses for a liquor brand. The first expense is the cost of the liquor itself. The second expense is the cost of production, which includes things like the cost of the bottles, labels, and shipping. The third expense is marketing and advertising.
How does a liquor brand make money?
There are a couple of ways that liquor brands can make money. The most common way is through the sale of their products to retailers. Liquor companies can also make money by forming partnerships with restaurants and bars. In addition, liquor brands can make money by selling their products to distributors.
Is owning a liquor brand profitable?
Yes, because liquor is considered a premium product the margins tend to be higher than those other types of beverages. It is also typically consumed in social settings, so brands can benefit from word-of-mouth marketing. Additionally, like other types of consumables, demand for liquor tends to be relatively recession-proof.
Why do liquor brands fail?
There are a variety of reasons liquor brands can fail. Poor marketing, a lack of innovation, and an inability to capture the imaginations of consumers are just a few possible explanations. Many liquor brands also tend to be expensive, and in an era where consumers are increasingly looking for value-for-money deals, that can be a major stumbling block.