I was recently asked by someone that was considering buying a liquor store that is for sale if location really matters.
It made me think, does it? Some experts believe that while it is still important, location, is not AS important in the liquor store business as it is with other retail businesses.
I think there is a case for both sides of the argument, but I feel as though location really does matter when you are considering a liquor store that is for sale and here's why.
It's a fact that location is important for any retail business when it comes to convenience. Customers are more likely to frequent businesses that are close to their homes or workplace. If your store is on the route to either location, they may choose you over driving across town to another store. So with the topic of convenience in mind, yes, I think location matters. I wouldn't select a store that was in the middle of nowhere or in a place that was difficult to get to.
Inventory & Demographics
Inventory is obviously a key part of the liquor store business. Look at the demographic that surrounds the business. A liquor store that is located near a University will probably be selling less high end wine and more kegs of beer. The opposite will be true if you are located in an affluent suburb. Since liquor stores are thought to be neighborhood businesses, it's important to think about what demographic you want to serve and what you want your inventory to look like. When it comes to the type of inventory you want to offer, location definitely matters.
Don't get me wrong, I'm sure a liquor store located near a University will probably draw a lot of traffic but it could also cause some issues for your business.
Locations That Can Cause Problems
As I just mentioned, buying a liquor store for sale in an area by a University could lead to a good, profitable business based on the sheer volume you'd be selling however, it could also cause problems for you as the owner. You have to deal with underage drinkers trying to purchase liquor from your store. As the owner, you can monitor this while you are working but once you leave your liquor store in an employee's hands, you are leaving yourself open to a potential liability if they don't adhere to proper procedures. Don't get me wrong, I know this could happen in the suburbs too but I think you would deal with this scenario more frequently in certain locations. In the state of California, if you are found to have furnished alcohol to a minor there is a minimum fine of $1,000 and 24 hours of community service.
High crime areas could also be a problem. In addition to underage drinkers, there is the potential for left, robberies and other types of infractions against the business.
If you are planning to compete with other liquor retailers solely on price, than location definitely matters. Whether you are the discount liquor store or the high end liquor store, you need to make sure the liquor store you are considering fits the location. A discount liquor store that has a minimal wine selection but is located in an affluent suburb may find that customers will sacrifice convenience and drive across town to get the wine they want causing them to lose business. So again, location is important when it comes to pricing.
To sum it up, yes, in my opinion, location does matter when it comes to buying a liquor store for sale from either a broker or an owner. The inventory you carry and the headaches you have will be driven by the location of the liquor store in many cases. So, choose wisely and make sure the liquor store you are considering is located in a place that will allow you to run the type of business you want.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Manjit Singh, Business Broker - SF Bay Area, Central Valley
Assistance in the SF Bay Area & Valley. Contact me about buying or selling a restaurant, liquor store, gas stations, markets, and c-store businesses. If you are looking to buy or sell a SF Bay Area, Central Valley liquor store, market, c-store, restaurant, etc phone me direct at 510-417-9429 Cell.
|Shalonda Chappel-Pilgram: Escrow & Bulk Sale Services - Southern California
Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.
|Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area
Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.
|William Park, Business Broker - Southern California
Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.
|Jack Oh, Business Broker: LA, Orange Counties
Business broker and real estate services in the Los Angeles and Orange County areas. 10 years experience with great negotiating skills. To sell a business or buy a business in the LA or Orange County Areas phone Jack and his team at 562-787-4989.
|Rick Carlson, Business Broker - Southern California
You Will Never Feel Lost In The Shuffle. Many Brokers Simply Send Out An NDA And That's The End Of Communication. All Buyers Receive A Personal Meeting With An Ace Acquisition Specialist So They Can Recommend The Perfect Business For You. Phone Rick direct at 800-985-4939.
|Helen Yoo, New Century Escrow - Escrow Services In Southern California
New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.
|Prabhjot Randhawa, Broker: SF Bay Area, Central Valley
I'm a Business Advisor at Liberty Business Advisors of San Francisco. I have over 20 years of experience in all phases of entrepreneurship. During the past 15 years my concentration has been in business of mergers and consulting. I have owned and operated over 10 businesses. 209-815-3842 Cell.
|Related Articles, Events, Blog Posts, Discussions, Videos, Interviews|
|When Buying A Liquor Store - Is Location Important? Many Items Factor In
Does Location matter when purchasing a liquor store? Some experts believe that while it is still important, location is not as important in the liquor store as it is with other businesses. Peter Siegel, MBA (BizBen ProBuy Program & Liquor Store Financing Expert) at 925-785-3118 discusses this topic.
|Successful Liquor Store Buyer: Shares Liquor Store Buying Tips With BizBen
Buying a liquor store can present some major challenges to buyers - a recent client on the BizBen ProBuy Program relates to Peter Siegel, MBA what the major challenges may be when searching for and buying a California liquor store business. Read what other Liquor Store advisors have to say as well!
|3 Tips for Increasing Profitability When Buying A California Liquor Store
When on your search to buy a liquor store business, consider additional ways that you may use the location to generate additional revenue streams. Peter Siegel, MBA (Liquor Store Purchase Financing, ProBuy/ProSell BizBen Programs) at 925-785-3118 discusses buying California liquor store strategies.
|Uncover Hidden Problems In Due Diligence When You Buy A Small Business
Most everyone who's decided to buy a small business in California knows the importance of due diligence. That involves close examination of a business prior to removing contingencies. But not everyone knows how to uncover problems that are not obvious. Here are five of the most common hidden issues.
|What Factors Are Considered In Valuing A Small Business? Advisors Weigh In
Valuing a small business is not guess work. It's not what some other businesses of the same type may have or may not have been sold for, it's not even what a business owner "feels" they want or deserve. It is a formula based on many factors. Peter Siegel, MBA from BizBen & others discuss this topic.
|Top 100 List: This Week's Top Motivated Business Buyers & Their Requests!
If you're trying to sell a business - check out this week's top 100 business buyers - one of these buyers may be looking to buy your type and location of business! This list is updated weekly - make sure you check it frequently! Are you searching to buy - get on this list and reach seller direct!
|How Many Listings Is Too Many For One Broker To Handle? Is It 5? 10? 20?
Peter Siegel, MBA in this Vlog/Podcast discusses how many listings is too many for one business broker to handle at one time. Is it 5 is it 20? I recently had a coaching call with one of my BizBen broker clients who asked that question this week. There are many factors that go into the answer.
|Is There Such A Thing As Paying Too Little When Buying A Small Business?
We all understand the idea of paying too much for a small business. But is there such a thing as not paying enough? That seems like an odd notion, but I'm familiar with situations in which a buyer acquired a small business for a figure substantially under what probably was market value.