Liquor stores range from local corner spots to major corporations with hundreds of stores. Some specialize in exotic, rare products, while others make most of their money on domestic beer and cheap wine. Yet all have a few things in common. They are retail stores selling a luxury product with a high markup that is prone to losses from theft or breakage, and they must contend with complex sales laws.
The Purpose of a Business Plan
A written business plan will help you meet these challenges and control your store’s growth in a logical and organized way. It will also prove to outside investors and lenders that your liquor store is a good financial risk.
Your business plan provides an overview of your liquor store at it exists today, as well as a defined growth plan for the next three to five years. It explains your business goals, identifies key obstacles, and provides solid strategies for meeting your goals. It is a living document that should be updated regularly as your liquor store grows and evolves.
The executive summary is an overview of your entire business plan, and is normally written last. Investors and lenders will use the first page to decide whether to read on, so make it count. Briefly describe your liquor store, provide a summary of your market analysis proving that an unfulfilled need exists, and explain your liquor store’s unique qualifications to meet that need.
In the company analysis, explain your liquor store as it exists in the present moment. Mention its founding, current stage of business, and legal structure. Discuss past goals that you have already reached, such as partnering with a supplier for a volume discount or securing a significant amount of funding. Then expand your explanation of your liquor store’s unique qualifications. Perhaps you hold the sole distribution rights for a local winery’s new products, or have an elegant patio to hold weekly tasting parties.
The industry analysis can seem confusing, because most average sized cities have numerous liquor stores. However, you only need to focus on your relative market, or the niche into which your liquor store fits. Do you specialize in hard to find liquors? Are you connected to your town’s tourist trade? Is yours a small corner store where people stop in after work? Research the current trends and future projections for your segment of the alcohol industry, and develop a strong plan for overcoming any identified hurdles.
Who will purchase your products? Are they wealthy connoisseurs, young adults on their own for the first time, working class beer drinkers, or tourists in town for something else? Do they see the liquor store as a place to get in and out of quickly, or a spot to see and be seen on a Saturday night? Do they purchase one or two bottles for home consumption, or buy in batches for weddings and corporate events? Narrow down your customer demographics as precisely as possible, and identify their unique needs. Then create a plan for meeting those specific needs.
Your competitors fall into two categories: direct and indirect. Your direct competitors are other liquor stores that fulfill the same need for the same target market. Your indirect competitors are other businesses that fulfill a different need for the same market, and liquor stores that fulfill the same need for a different market. Describe each of your direct competitors individually, and explain what sets your liquor store apart. For your indirect competitors, group them together and talk about them as a whole.
A good marketing plan is based on the four P’s: Product, Place, Price, and Promotion. Product is a lengthy section for liquor stores, because it individually names each item that you sell. Place is your physical location, as well as your online presence. Price delineates how much you will charge for each item and your reason for setting those prices. Promotion refers to how you will bring in new customers. Another category, Customer retention, focuses on building repeat business.
Your operations plan delineates the ways you will meet your defined goals. Everyday short-term processes include all of the steps involved in ordering products, selling them, and preventing shrinkage (loss due to theft or breakage). Long-term processes focus on your business goals, such as opening a second store or hitting a particular monthly sales volume.
If your liquor store is small, you might have difficulty with the management team section. Identify anyone on your team with a business background and highlight that person’s experience here. If you have no one, look for a business advisor, and detail the ways in which that person will contribute to your liquor store’s growth.
The financial plan is the section that financiers will most closely scrutinize, yet it can be tough to write. Your cost of goods sold and shrinkage will make a dramatic impact on your financials, but they can be hard to predict. You must also separate your individual revenue streams and explain their relative importance and timeline for implementation, disclose outside funding, and summarize both your past and future Income Statements, Cash Flow Statements, and Balance sheets, based on verifiable key assumptions. Financiers also look for a solid exit strategy that shows a deep understanding of the market and willingness to capitalize on profitability.
The appendix includes your full financial projections along with any supporting documentation that proves your claims.
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