A liquor store sells a lot and keeps a little of each dollar: in the example, about 27 cents after the cost of what's sold, and less on beer. The plan turns on two things that follow from that. First, volume: a store needs strong sales to cover rent, wages and insurance. Second, the shelves: a liquor store opens with more money in inventory than in anything else, so what matters is how fast each category turns and what it earns on the cash sitting in it. Beer keeps the least of each sale but turns every few weeks; a wall of spirits keeps more but sits longer. On the paperwork side, the state license is the big one, and federal law asks every retailer to keep records of what came in, who from and when, for three years. In the example, a Peoria liquor store opens with $288,000, ends its first year about $2,800 behind before the owner's pay, and makes about $2,800 a month at full speed. Below is each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the store in a paragraph: the neighborhood, who's buying, what's missing nearby, the goals.
- Plan sales by category per $100: spirits, wine, beer, mixers and snacks, special orders.
- Margins are thin; volume and turns decide the plan.
- Measure each category by what it earns a year on each dollar of stock, not by its margin.
- Most of the startup is inventory; it sells and is bought again, unlike the build-out.
- Keep receiving records three years, and write up any sale of 20 wine gallons or more.
- TaroStack counts by the case and the bottle, and values the shelves at cost. More below.
Part 1: the business description
Knoxville Avenue Liquors, the made-up liquor store in Peoria, Illinois, I use in these examples, wrote this before it opened:
Knoxville Avenue Liquors is a 3,000-square-foot liquor store with spirits, wine, cold beer and seltzers, mixers, snacks and ice, special orders, and local delivery where allowed. In its first year it aims to reach $70,000 of sales a month.
Part 2: what each category earns on its stock
| Category | Stock at cost | Turns a year | Kept a year | Earned a year on each $1 of stock |
|---|---|---|---|---|
| Spirits | $70,000 | 3.9 | $86,400 | $1.23 |
| Wine | $45,000 | 3.3 | $69,120 | $1.54 |
| Beer and seltzer | $20,000 | 8.0 | $44,880 | $2.24 |
| Mixers, snacks and ice | $5,000 | 5.3 | $21,600 | $4.32 |
Turns a year = what the category costs the store in a year ÷ the stock at cost. Earned on each $1 = what the category keeps in a year ÷ the stock. Beer keeps only 22 cents of each sale but turns eight times, so each dollar on the beer shelf earns more than a dollar of spirits. The store keeps its spirits wall to what sells and special-orders the rest. The measure is in GMROI formula, and the weekly count in liquor store inventory.
Part 3: the records
Every retail dealer in spirits, wine and beer keeps, at the store, records of what was received, who from and when, as the invoices or a book record, and a record of any sale of 20 wine gallons or more to one buyer at one time (27 CFR 31.181), for at least three years (27 CFR 31.191). The state license, its cost, and what it allows for delivery and tastings are set by your state and city. This is general information, not legal advice.
Part 4: what each category earns
| Category | Sales | Variable cost | Contribution | Margin | Hundreds a month at full speed |
|---|---|---|---|---|---|
| Spirits | $100.00 | $76.00 | $24.00 | 24.0% | 300 |
| Wine | $100.00 | $68.00 | $32.00 | 32.0% | 180 |
| Beer and seltzer | $100.00 | $78.00 | $22.00 | 22.0% | 170 |
| Mixers, snacks and ice | $100.00 | $55.00 | $45.00 | 45.0% | 40 |
| Special orders and delivery | $100.00 | $72.00 | $28.00 | 28.0% | 10 |
Variable costs include card fees and breakage. At full speed the store sells $70,000 a month and keeps $18,780, 26.8%; spirits bring $7,200 of it. Wine keeps the most of each dollar among the drinks, and the snack and ice rack keeps more still, on a small share of sales.
Part 5: the first year, month by month
Fixed costs are $15,950 every month: rent ($5,000), wages ($7,500), utilities and the coolers ($1,400), insurance with liquor liability ($800), the register and software ($300), license renewals ($200), security ($250), and other costs ($500). Sales start at 60% of full speed:
| Month | Sales | Profit | Cash, year to date |
|---|---|---|---|
| 1 | $42,000 | −$4,682 | −$4,682 |
| 2 | $45,600 | −$3,718 | −$8,400 |
| 3 | $49,000 | −$2,804 | −$11,204 |
| 4 | $52,600 | −$1,840 | −$13,044 |
| 5 | $56,000 | −$926 | −$13,970 |
| 6 | $58,800 | −$170 | −$14,140 |
| 7 | $61,600 | $569 | −$13,571 |
| 8 | $63,700 | $1,132 | −$12,439 |
| 9 | $65,800 | $1,708 | −$10,731 |
| 10 | $68,000 | $2,299 | −$8,432 |
| 11 | $70,000 | $2,830 | −$5,602 |
| 12 | $70,000 | $2,830 | −$2,772 |
The year's sales are $703,100, and the store ends it $2,772 behind, before the owner's pay. It breaks even at about $59,500 of sales a month, in the seventh month; the lowest cash point, −$14,140 in month 6, fits inside the $30,000 of working cash. December, with holiday parties and gifts, is the busiest month.
Part 6: the startup budget
| Item | Example |
|---|---|
| Opening inventory | $160,000 |
| Shelving and walk-in cooler | $45,000 |
| Build-out and signs | $30,000 |
| Lease deposit and first month | $10,000 |
| Register, scanners and cameras | $8,000 |
| Licenses and permits | $5,000 |
| Working cash | $30,000 |
| Total to start | $288,000 |
The $160,000 of inventory sells and is bought again; the $98,000 of fixtures, build-out, deposit and licenses is earned back in about three years at full speed. A store built around wine is in wine shop business plan.
Get the template
Download the liquor store business plan workbook. Four sheets: your categories, each per $100 of sales with its variable cost and hundreds a month at full speed; the first year, month by month, with sales ramping up, profit, cash, the first profitable month and the lowest cash point; your fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan uses one stock figure per category. The store has thousands of items, and the cash sitting in slow bottles only shows up when someone counts them and values them at cost.
How TaroStack does it
TaroStack counts by the case and the bottle, and values the shelves at cost.
Buy by the case, stock by the bottle. Spirits and wine are bought by the case and stocked by the bottle, and TaroStack does the math.
Stock value. What's on the shelves is valued at cost, by FIFO layers or moving average, freight included.
Receiving. Each delivery is received from its supplier with its date and cost, and the reorder list shows what's running low.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What the shelves are worth | A count and a lookup | Stock value at cost |
| What came in, from whom, when | Invoices in a box | Deliveries received from each supplier |
| What to reorder | Walking the aisles | The reorder list |
Counts, receiving and stock value are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.