Training and Development. The training and development is one of the core functions of the human resource management. As it the core function of HR trainer, gives and imparts employees the skills and knowledge to perform their jobs effectively. In addition to providing training for new or inexperienced employees, organisations often provide training programmes for experienced employees whose jobs are undergoing change.
Large organisations often have development programmes which prepare employees for higher level responsibilities within the organisation. Training and development programmes provide useful means of assuring that employees are capable of performing their jobs at acceptable levels. Performance Appraisal. Performance appraisal function monitors employee performance to ensure that it is at acceptable levels. Human resource mangers are usually responsible for developing and administering performance appraisal systems, although the actual appraisal of employee performance is the responsibility of supervisors and managers.
Besides providing a basis for pay, promotion, and disciplinary action, performance appraisal information is essential for employee development since knowledge of results feedback is necessary to motivate and guide performance improvements. In order to assess the performance of employees, HR managers have to establish performance standards, communicating established performance standards to their employees, measuring the actual performance of employees by using various methods of performance appraisal and finally comparing actual performance of employees with the established performance standards so as to identify the gaps in the performance of employees.
It gives a clear picture of employees performance status thereby HR manager will develop a plan for filling up of gaps in performance of employees by way of providing suitable and focused training for improving the skills in employees. When it comes to period of conducting performance appraisal of employees, it all varies from organisation to organisation, it could be annually, half yearly, quarterly, monthly and some organisations conduct performance appraisal on regular basis mostly with the support of human resource information systems.
There are various methods of performance appraisal of employees classified as modern methods and traditional methods. It all depends on the nature and type of the organisation decides what method of performance appraisal system is adopted and some methods of performance appraisal of employees may not be suitable for some sort of organisation. One of the most used traditional method of performance appraisal system is confidential report writing which is especially administered in the formal of organisations and governmental institutions like judiciary in order to prepare a report on performance of its employees by their superiors for submitting to the controlling authority which will take corrective actions and measures on under-performing employees and rewarding best performance.
The Concept and idea for Career planning has been developed partly as a result of the desire of many employees to grow in their jobs and to advance in their career. Career planning is the process of establishing personal career objectives by employees and acting in a manner intended to fulfill their career objectives. Alternative names for compensation are payment, salary, wage or remuneration.
But grammatically there is difference between those nomenclature like compensation nomenclature is used for payment of amount in case of accident or death of an employee during the course of employment and such employee should not be under the influence of alcohol at the time of accident or death. Remuneration and salary can be used interchangeably when period of payment is monthly to an employee, whereas wage nomenclature is used when period of payment is daily to an employee.
Payment of compensation or remuneration is the fundamental duty of an employer, failure to fulfil his or her duty shall be liable for penal action in the court of law and will be interpreted as exploitation of workers and shall be viewed seriously by the court of law. Similarly payment of compensation or remuneration is the right of an employee for the work done and deprived employee can seek for justice in the court of law.
There are employment and labour laws for every country which govern the payment of compensation and remuneration for workers, procedure and methods for payment of compensation in case of accidents and deaths. According to principles of natural justice, and employer shall pay fair wages or equal pay for equal work which is constituted as fundamental right to an employee. Compensation or remuneration is the basic motivating factor for any employee, it also acts as primary factor for retention of employees in an organisation which is the frenetic task for any human resource manager.
Unjustified or improper remuneration will trigger dissatisfaction and sometimes may lead to unrest among the employees which may lead to strikes that will hurt organisation badly in all aspects. On top of it such organisation will have to face legal action and penalty which is and cost for an organisation, consequently it causes damage to the reputation of organisation and employer branding which involves lot of effort to build it.
Human resource personnel provide a rational method for determining how much employees should be paid for performing certain jobs. Pay is obviously related to the maintenance of human resources. Since compensation is a major cost to many organisations, it is a major consideration in human resource planning. Compensation affects staffing in that people are generally attracted to organisations offering a higher level of pay in exchange for the work performed. It is related to employee development in that it provides an important incentive in motivating employees to higher levels of job performance and to higher paying jobs in the organisation.
Employee Benefits. One of the core functions of the human resource management is administration and management of benefits of employees. Employee Benefits are another form of compensation to employees other than direct pay for work performed. As such, the human resource function of administering employee benefits shares many characteristics of the compensation function. The cost of benefits has risen to such a point that they have become a major consideration in human resources planning.
However, benefits are primarily related to the maintenance area, since they provide for many basic employee needs. Basically employee benefits are classified into compulsory or statutory benefits and discretionary or voluntary benefits. Compulsory statutory benefits must be provided to an employee by his employer without failure. In case if an employer fails to provide statutory benefits to his or her employees such employer is liable for penal action and deprived employees can see court of law so as to claim their right to statutory or compulsory benefits.
Whereas discretionary or voluntary benefits purely dependent upon the will and wish of his or her employer, failure of providing such benefits cannot be enforceable in the court of law. Benefits like flexible work, paid vacations, work form home, earned leaves and other employee benefits, Here is a list of voluntary employee benefits provided by the corporates. Employees have no limit to the number of days they can take off, as long as they get all their work done.
Free gourmet food and never ending snacks. Contribution The contribution payable to the Corporation in respect of an employee shall comprise of employer's contribution and employee's contribution at a specified rate. According to a study, employees who are motivated or feel motivated are tend to work more when compared to unmotivated to employees. We have listed major factors that motivates employees.
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Having handsome salary motivates employees, indeed it acts as a retention factor also. Employee benefits are additional to the salary of employees, employee benefits are classified into voluntary benefits and statutory benefits which include social security benefits which are compulsorily provided to employees. Few examples of employee benefits are paid vacations, free food, dependent benefit, medical benefit, maternity benefit, paternity benefit, payment of bonus, payment of gratuity and provident fund.
Maintaining and providing good working conditions not only motivates employees but also prevents employee from facing legal action by the court of law as they are mandatory according to labour laws. Good working conditions includes providing flexible timings to work, giving correct workload to avoid stress, maintaining healthy environment and HR manager s should see that there is work life balance to their employees. Having all those will definitely motivates employees to work efficiently and also avoids distraction from work.
The very purpose of having policies or making policies is only for making employees feel comfortable and to treat them undiscriminating. Having good company policies will drive employees to dedicate themselves to the organisation and to reach its goals and objectives. It is all because of the pride one will feel working in such organisations and keep employees motivated. Employees in order to retain and have foothold in such organisations, one will try to stay motivated and it is effort and is job.
Building employers brand and reputation is a continuous process in which organisation should try to be best in all aspects compared to its competitors. Career development or career growth is one of the top 10 motivating factors for employees. No employee wants to retain in same position in a job for a long time, he or she wants to move forward or higher-level in their career by taking promotions in-time, which makes any employee feel happy and motivated as taking promotion in a job is most happiest and memorable moment for any employee.
Besides HR manager s should give opportunity to their employees to develop their skill set and knowledge for career development. Job security Job security standards in the top list of preference of employees. For any employee job security is the first and foremost important factor before taking up any job. Having job security in a job will make an employee to overlook all other benefits. The sense of security in job will develop confidence in employees which will make themselves to push forward while handling critical in tough situations in the job, in other words job security acts as a motivating factor.
Healthy relationships Consisting of good relationships with superiors and colleagues in organisation is a priority for any employee since improper communication and misunderstandings with superiors and colleagues lead to psychological stress which makes employees demotivated and shows effect on work life. Having healthy relationships with superiors and colleagues will help and have support in getting things done easily and also keep employees happy at work that boosts their energy levels and make them to stay motivated. Welfare, healthy and safety measures Maintaining welfare, healthy and safety measures of employees is not just function but they are mandatory to maintain by the human resource management department.
Failure of performing said functions or failure of maintaining said measures, organisation shall be liable for penal action by the law. Employee welfare: includes providing good canteen facilities, first aid or medical facilities, restrooms, lunchrooms and childcare facilities.
Employee healthy measures: maintaining cleanliness at workplace, disposal of waste and its management, providing healthy working environment, washing and cleaning facilities with freshwater etc. Labour Relations. The oldest and most basic human resource management function is employee record-keeping.
This function involves recording, maintaining, and retrieving employee related information for a variety of purposes. Records which must be maintained include application forms, health and medical records, employment history jobs held, promotions , transfers , lay-offs , seniority lists, earnings and hours of work, absences, turnover, tardiness, and other employee data. Complete and up-to-date employee records are essential for most personnel functions.
More than ever employees today have a great interest in their personnel records. They want to know what is in them, why certain statements have been made, and why records may or may not have been updated. Personnel records provide the following:. A guide to the action to be taken regarding an employee, particularly by comparing him with other employees. A guide when recruiting a new employee, e. A historical record of previous action taken regarding employees. The raw material for statistics which check and guide personnel policies.
Depending on state law maybe use the ft to sell snacks etc convenience store style. As for change as I understand, the gross has gone down since the present owner has had it by about k.
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The owner admits this is mostly from not operating it himself and not managing it properly because of his other commitments. It is close to a lake, maybe bait and fishing gear along with the convenience items? Thank you, again Dave. Is the location rural? If so, might be very slow when it gets cold, i. Fishing gear is a good idea. But I would want to see a transaction count to better understand seasonal variability.
The price seems reasonable since real estate and equipment is included, depending on market values for similar property in the area. You may want to request a provision to avoid depleted inventory when you take over. In this situation I would probably want an owner carry deal. If he says he wants a clean exit so he can take the money and move on I would run the other direction. Any tips? Be sure to start out with plenty of cash in the bank after you purchase the store to ride the inevitable ups and downs while you learn the particulars of the customers and suppliers in your market.
Very impressed with your blog, business acumen and willingness to help others! Store is in NY — wine and liquor only. Also curious as to what you think about an owner putting in hours with employees covering evenings and weekends? Store is located on a very busy roadway in a large shopping center next to a supermarket. This business has had continued sales growth each year since it was started in At 2, sq. There are 6 years left on the lease it can be extended. State of the art POS software. Sounds like a good opportunity with strong cash flow.
Owner working 50 hours per week should be fine if you have good people and treat them right. Maybe take off Sun-Mon. David: Did you end up buying the store — I am looking at one, also in NY, that seems to be very similar Not the same one though. Just curious, thanks. Great article sir! Liquor store is doing 2.
Location is great, right off the main road in town, with ample parking. Please let me know what you think. Hi Jay, how much do you think the real estate is worth? Also, does the asking price include inventory? I have a partner and would like to invest 75k each. Now, rather than both or one of us behind the counter we want to hire employees and have the pay be commission based.
I do understand paying commission will eat into our profit but I think in the long run we could have employees that could push sales and would be willing to educate themselves in the products. If we were to go with commission based pay, how much or what percentage do you feel would work well? Hi Harvey, thanks for visiting and posting your questions.
Depends on too many factors, especially the local market dynamics, location, competition, etc. If neither of you works the store you may not have much of anything left at the end of the year. For a store at that volume I recommend you work behind the counter. More importantly you need to get to know your customers so you can provide the level of service necessary to keep them coming back. My advice is to find a partner who wants to work at the store full time. Sorry, this is probably not what you wanted to hear.
First of all, thank you for all the information you are providing and for posting this great blog. It is very informative for the first time business buyers. Also, it will motivate people like me to post and share our experience so people make less mistakes and excel. I plan on buying a liquor store in IL. Owner has 5 employees and also pays salary to self I have to find out how she pays herself. Payroll expenses are 82K. Hi Om. These numbers seem pretty good. Asking price is slightly high but not unreasonable.
Depending on your financial circumstances, you might ask about the possibility of owner carry so you can begin with the strongest possible cash position. Thank you very much for your input. How do you verify the sales and makes sure the numbers are correct? I am guessing tax papers?
How are you? I have couple Qs please help me out, any comments or your advice is appreciated. Story: One liquor store in GA sell 6,5 millions plus 1. Total sale 7,7 millions Cost goods sold. Thank you for your time and kindness to help me out, any your advice or comments is appreciated. Is that correct? You should get an appraisal from a good realtor who knows the local market. See 1 for real estate. Thank you very very much Justin.. I am very happy to accept your advice and I will make a deal like that. I also check the real estates to see what going on.
Dearest, Paul. Hi Jack. Use my contact form to send me a private message and we can go from there. Thanks, Justin. The numbers you have given from the GA liquid store are similar to a store I am evaluating. Would you mind giving me your phone number or email address, I would like to know if you ever got it? Why and why not? I am looking to buy a liquid store at similar price point here in Atlanta, GA. Ok… I have a friend looking to set up from scratch a liquor store in the Rustenburg area of South Africa.
This is a total start up from nothing. I have read the entirety of comments and answers on this page so now have much information to digest. How would you approach this situation early days as it is? Hi Jason. Hi Justin, how are you? I have couple Qs, please please help me out, Justin. I do appreciate your time and kindness. In general, what do we have from seller before first offer. So do i need an agent for me. Is it right? If i have first offer document, do i need an Attorney to do that. Do I have to pay from my pocket for appraisal?
Please help me out about appraisal, when and how we need to do that. Even now we dont know much seller info, but we do offer we have to have some conditions. So i list following. Plesse help me anything else we have to do. This contract shall be contingent upon the closing of the existing business located at address 3. Buyer shall pay only closing costs associated with obtaining the SBA loan. Seller shall pay all closing costs associated with this transaction the sale of land, improvement, and Business.
Seller warrants that Seller and the Manager s employed at the liquor store Business shall provide training to Buyer, at no additional cost to Buyer, from the date in which Seller receives the commitment letter issued by the Lender until thirty 30 days after closing date. Training shall be provided every day that the liquor store business is opened and from the time the business opens to the time that the business closes. This provision shall be considered a personal service agreement between Seller and Buyer.
Seller acknowledges that a material breach of this paragraph will result in irreparable and continuing damage to Buyer for which there will be no adequate remedy at law. The parties expressly agree that this provision does not represent a penalty or punitive clause but represents an agreed measure of damages, the amount of which is impossible to determine on the date of this Agreement is signed.
I know you are busy of schedule , I am proud of you and appreciate what you have done for me. You should consult an attorney before signing any sort of formal purchase agreement. Be sure a formal offer is contingent on financing, property inspection and verification of sales data so you have the option to walk away once you learn more. In fact, it can be a good strategy because the seller may start counting their money before the deal is done giving you leverage. Thank you very very much Justin. How should I go about this? I have ZERO idea about liquor business or any retail business.
Good luck, Justin. Thank you so much for your insight and expertise. My husband has recently taken and interest with opening a liquor store from scratch in the Atlanta area of Georgia. We do not have any start up cash, and would be looking to the bank for a loan. We also would be looking to sign a lease for location for the business. He is willing to work in the store full time, and I will help out on weekends. I have read your post as well as the comments. I know it will be challenging but, in your opinion, does it seem feasible for us to try our hand with such a business, considering we have no cash to start with and not a lot of knowledge about this industry?
Hi Jo. I would recommend against it. Note this is based on my attempt to read the very complex and poorly organized liquor code in Colorado. Also, your lack of experience is concerning. My recommendation would be to suggest to your husband that it might be wise to work as an employee in a liquor store before making the plunge. He can offer to work for cheap and maybe a manager or owner could teach him more than cashiering. This store needs to be closed and cleaned up, I want to change it into a fine wine and craft beer store.
The neighborhood is ripe for it, highlands area in Denver. Hi Mark, Many liquor store operators under-report cash sales. Base your offer on his tax returns. Justin, Thanks for your feedback. That would change some as this would be primarily owner operated. Nothing wrong with a competent, cost effective manager but much more would be superfluous.
At that rate the complete ROI would be years. Hi Steve, This sounds like a good deal. As far as profit, how much net profit are they showing with the numbers above? In any case, this does sound like a pretty good deal. Hi, can you tell me who I need to talk to to get pricing on beer, wine and liquor. Hi Andi — you need to contact local distributors. You could also try talking to liquor store owners in the same market.
Grocery stores in Oklahoma do not sell Liquor yet, but it may happen anytime. How would it effect out business if they start? The store is located on the busy road with Walmart about 1 mi and no other grocery stores to the east. Can we still hope to make same amount of money ,even if grocery stores will start selling liquor? Thank you. If grocery stores are able to sell liquor and the neighboring Wal-Mart chooses to participate it will be extremely difficult to compete.
I think you can safely assume your revenue will decrease if the laws change in favor of grocery stores. But I would think the retail liquor lobby would be able to negotiate some sort of concession for independent liquor store owners. If it were me, and I really liked this opportunity, I would use the uncertainty to negotiate a lower purchase price with the current owner to help offset the risk. Or perhaps ask for owner financing so he shares part of the risk.
I live in the great state of Tax Mass achusetts. My wife and I have been kicking around the idea to open a liquor store in a pretty busy main road where I am sure one complex we are looking at the lease is high. As far as what we would need up front I assume we would have to apply for a liquor license which I am sure if expensive here in Mass.
Is that along with inventory a pretty pricey up front cost I assume? Enjoyed your article. It was very informative. Can you give me a percentage breakdown of what takes the most time running a liquor store? Hi Allen, inventory management and cash flow management are the two biggest headaches. Thanks for the information. Could you see a liquor store making it if they were closed from Friday evening till opening again on Saturday evening?
Do you think a reputation as primarily a high end store would help or hurt with this schedule? Hi Cole. No way. Friday and Saturday are the biggest sales days of the week. A reputation as a high-end store is good if the population in your trade area is equally high-end. Reading through your blog has been very enlightening. One of many questions I have is when buying a liquor store in Colorado, the buyer determines there is dead inventory, how does the buyer approach the seller.
Do you know what the seller can legally do with the inventory? If possible I would like to talk with you in person about our endeavor. TIA for your reply. When I sold my store I had to take the dead inventory home.
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Happy to chat further. Use my contact form to send a private message. I would greatly appreciate it if you could give me some insights as to whether this is a profitable or safe buy to dive into. The business is posted for k asking price plus another 75k for inventory. Facility is about sq. But eventually I would like to just hire a manager and take over the store. The store is located in a strip mall, which is in the process of redeveloping, and posting says the store has good visibility as well as location to several large apartment complexes.
Also, I read that Kansas just passed a bill this year that would allow grocery stores to sell liquor and wines starting July How much do you think this would affect the sales of an individual liquor store? Hi Jessica, The price seems reasonable but that may be due to the potential impact of grocers entering the market. And 3 years will go by pretty fast.
Your article was very informative. However I have a question. I am looking to join the craft spirits industry, and as you said, the distributors hold all the power thanks to the 3 tier system. I am a little concerned that getting products onto the shelves of retailers may be difficult as most retailers want to deal with just the major distributor accounts, and we all know that getting the distributors to pay attention to a new brand is like pulling teeth.
My question is, is it possible for a retailer, or a group of retailers to force a major distributor to pick up a brand that they want on their shelves, and is there some sort of central ordering system that retailers use to place orders from their various distributors? Hi Eddy. It will be an uphill battle.
In Colorado, a Colorado-based producer of beer, wine or spirits can sell directly to retail liquor stores in Colorado but most of them end up working with a distributor. It may be possible for retailers to band together but I think the system is set up to avoid such collaboration and bulk purchasing. You might contact the Colorado Licensed Beverage Association and ask them for input. They know much more than I do.
But it depends on how much lower prices would be per unit. It might not be enough. Hi Justin, Thanks for all the valuable information above. I am looking at a liquor store in florida, sales of , last year, previous year , and the year before , the store is only five yrs old and the owner is asking , nets , I think should be a fair price as it includes , inventory.
Do you think I should rely on the numbers, they do come from tax returns but only last years sales were high the years before were comparatively low. Thanks for your inputs. Hi Kulu, I would want to understand how the revenue more than doubled in 2 years.
Seems suspicious. Maybe ask for a monthly breakdown. Hello Justin I am looking at a store. The seller says that he has not kept records for some time. The seller does not work at the store anymore but I would work 40 to 60 hours a week. My question is how much a reasonable price would be, and is there anything else that I should be looking at.
Does his price include inventory? If his price does include inventory you might not be too far apart. You have confirmed what I was already thinking. That would give me some room to go up a bit. I was looking at a smaller average mark up when I was running my figures. I recently sold a professional, consulting services business with about employees that I owned and ran for the last years.
Large inventories and dealing with distributors will be new to me. I am used to working for myself and over the long haul, I like the idea of a relatively stable, long term investment that can provide me with a good income and be able to run things part absentee as time going on obviously more hands on in the first few years. Am I crazy to think a liquor store might be an good opportunity?! Probably take out an SBA loan so there will be debt servicing. Can you help be back into a few numbers?
Just a ballpark. I fully plan to work the store myself, now the next step is coming up with the proper financing. Thanks again for all of your insight and advice. Just wanted to clarify for you and all people who read your post, that in Russia there is no three tier system and you are allowed to import your wine, beer and hard liquor from a manufacturer directly to your store or purchase it from local producers! Thus, please, let it go with this silly Russia non sense.
It only grows hatred and misunderstanding between two Great Nations! As for rest, thank you for a great post! We are thinking of opening a liquor store in Miami and you definitely brought some light to the matter! Hi Dmitri, Sorry if you were offended. And was a different time in US-Russia relations. I have only love for the people of Russia. Watch the movie and let me know if you still think use of the quote is hurtful.
Best of luck with your venture in Miami! Thanks for providing us your knowledge for free and helping others to make the right business decision from you experience. I hope all those you have benefited from your free gift will do unto others as it was done unto them. Enough Respect db. I own a 26, s. They also said alums have no where to go and have a pre game party — so they were thinking a nicer store with a banquet room in the back and would support on premises consumption that way.
Also alumni would be bigger spenders. Cash flow would be much slower during summer. Hi Dan, Lots of factors to consider. I would also check with the local liquor control board or equivalent to educate yourself on legal requirements. Laws vary from State to State so someone local would be best. My business partner and I are interested in buying a liquor store in Wisconsin on a small lake. The actually village is small, roughly pop. That could be a problem. The store sells bait, tackle, pontoon boat and kayak rentals and boat slips along with having the largest wine selection in the county.
Any thoughts and help would be extremely helpful, thanks! The deal includes real estate. If the real estate is worth less obviously you should adjust your offer accordingly. One additional thought. If something unexpected happens during the summer, maybe a problem preventing use of the lake, your revenue and income could be completely shot down. This is a good reason to be more conservative on the business valuation. The solution is to amortize over 20 years but allow the owners to cash out at the end of a few years, probably no more than 5.
The advantage of Owner Carry is two-fold. Hello Justin Thanks for the article. Very informative. Grateful if you can advise how did you manage budget on purchases on CGS? Did you manage weekly or monthly? Did buy deals or bottles on spirits liquors? Beers understand deals would make more sense considering lower cost of beer vs spirit liquors. Overbuying can hurt your PL. I own a liquor store in NJ for approx 10 years and find it very challenging in managing the CGS purchases weekly. JN, We tried to manage weekly.
It was a huge challenge to forecast demand or stay within budget. We overestimated December sales demand and it nearly killed us. The best solution is to have tons of cash so you can fully stock your shelves and patiently wait for sales to roll in. But, of course, having tons of cash is a good solution to many problems. Thanks for the comment! I am considering buying a place in MA. The details I have so are as follows. They did k last year.
The rental is lease per month but its a NNN- taxes are about 6k, no idea about insurance for the building or the business. The lease has 4 more years and has 2 5yr options to renew. My first thought is its way to expensive and should be around k. How much profit do you think I could make on this deal?
I would have to finance k or so with the owner, assuming he would do it. I would then be able to scrounge up enough left to stock the store 70k if I drained some accounts. I agree. I would caution you not to drain all your bank accounts in order to purchase and stock the store. Its a solid location but is currently the 2nd best liquor store in town, another does much better business by the looks of things, and a 3rd may actually do more business as well being in a little strip mall on the way into town. My spot is on the other end of town on the way in from the other side.
There is upside growth, the owner is older,he does not do any type of advertising at all. He does not have a web-site of course…If I did it, I would want to do wine tastings, he never does them…I would also like to add a larger selection of cigs, cheese, crackers- I would look at things like total ice sales. If they were decent but not hugely profitable because he does not I would also buy an ice machine to make my own ice, not sure he has that. It appears as though the place is under agreement again I spoke with the owner at length today. He signed an offer the other day for k and would not take a penny less he says.
No owner financing available. It would be easy to check that based on purchases if deal fell thru IF I was interested and I am not. The place had a ton of storage upstairs and down but only about sq feet of sales space. He only has 2 part time workers for a total of 20 hours combined…he works the place by himself basically. The K includes wk lottery sales- profits on that are roughly in mass. So alcohol sales are really only about k or so I am guessing. Whats the value of this place? Hi Mike, How do they explain the drop in revenue? Rent sounds pretty steep, too. Who owns the building?
A third party or current operators? Sorry they hit the flood last year in May. And they depends on somewhat on Texas state students. As they said. Building own by a company in Dallas they always renew every 5 years as last 25 years. Great article! Good stuff! I have a quick question for you. You seem like you guys are doing really well over there. Do you chalk your success up solely to location, selection, and customer service? Are there any marketing strategies that you find vital to your stores success? Any information would help, and I appreciate your time!
The person who bought the business seems to be doing well. Sales have gone up consistently year over year. They are showing a GP of K and Net profit of 51, They are currently asking k for the business and an additional 50k for inventory. Any advice you could provide would be wonderful. The price tag sounds pretty reasonable actually. Kind of makes me wonder why are they selling. Is something too good to be true? Be careful to structure the contract so you can still walk away with your earnest money if you find something fishy.
Hi Charlie, If you mean start from scratch with new location and inventory and equipment, the answer is no. Even then you will be vulnerable to cash flow volatility. I would try to pad your account a little further before jumping in. Hopefully it goes without saying that these are total guesstimates on my part.
My name is Rene I am trying to open a liquor store do you have any advice that could help with persuading city council on why is a good idea to let this kind of business open and maybe what kind of evidence would be needed if I get to the public hearing any information would be helpful. Other factors would depend on the city, the neighborhood, nearest competition and a variety of other factors.
Wish I could be more helpful. Justin First off thank you for all the advice you are giving out for free on this blog. I am in the process of buying a Liquor store. I could put down more but I want to reserve some cash for things that might come up while running the business. Here is my problem the bank does not want to lend money on this business. So do you have any ideas on other forms of financing that you could share with us?
I am not sure where to go from here. You could offer to pay a higher than average interest rate along with an option to cash out after a few years, maybe 5 years to give you time to build a bit of a war chest. Hi Justin, Firstly, Thanks for all the advises that you have been giving to help people understand this liquor business. You are an awesome person. Just like all others, I also need some advice on buying a liquor store.
I am currently looking for a store that has gross sales of 1. Asking price is k and k inventory. It has an owner operator cash flow of k. How should i go about this deal?
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Do you think it will be a good business for me? I am actually a first time liquor store buyer. I would be really grateful if you can give me some guidance about this. This sounds like a pretty high-speed liquor store for your first venture. Would you be doing this alone? You might want to start smaller. My only suggestion would be to focus more on making your customers happy and less on moving product from your preferred supplier, even if said supplier is your brother. Can you email me your phone? I have several questions to ask in regards to potentially opening up a liquor store!
Hi Taylor, You can send questions via email by using my contact form below. I prefer not to give out my phone number. I am involved in a startup that wants to get a product drinking game into a distribution network for liquor stores. My question is, how do you supply your store with product other than alcohol? Do you purchase everything through a distributor? Hi Kipp, All alcohol must be purchased through a distributor. Non-alcohol items e. Distributors will push their new products, definitely. For something like a board or card game it would be challenging.
I doubt a distributor would be interested…but you never know. Perhaps you could get sponsored by a big distributor? They like to give away swag and other promotional items. Thanks for all the advises that you have been giving to help people. It is really good location in front of collage dorm and its close to my house. Hi Tony, See if you find any information on comparable sales in your area. Is the owner willing to carry or are you paying cash?
Gross , a month, 61 year old business and building grandfathered in , with fuel and tobacco. What is your estimated value of the real estate? Hello attempting to see if asking price is too far out. I know with or without inventory. Maybe there are special considerations that make it a good deal but, for me, the price is way too high.
We own the shop an property an are on the main corner of a k county. That is a main thru way to one of tn largest vacation areas. The county has set regulation that there can only be 6 liquor stores. I have the opportunity to be one. An at this time we are planning to in large the building size from sq ft to sq ft. The tn laws I have read states the liquor sales an storage can only be on the bottom floor. I own an opperate a business that will be moved to the second floor an will generate the residual to cover all business exspences.
How did you get that covered? I have owned an operated 6 businesses. Do you see any set backs to this area of sales? Local Moon shine also? I bought insurance to cover the building and I paid extra to insure lost business revenue if something bad happened that would force us to close our doors. Because alcohol is heavily regulated in most states you have to wade through plenty of bureaucracy. Just part of the deal if you want to be in the liquor business.
Local brewer or distiller promotions tastings, etc are generally good for business as long as everyone is following all state and local regulations. Hi Justin and everyone else for all this excellent information. I live in Los Angeles, I work in a bank as a teller for years and finally saved up some money to buy my own business as I get old. A friend suggested a Liquor store that is in business for the past 10 years.
There is a CVS and 2 other liquor stores about blocks away and there is another supermarket coming up in the next 10 days to the south. I am very confused to go for it or not. Where do I learn more about the types of Beer, Wines and Liquor? Asking price is k with k in inventory. Sales are 1. They say cash flow is around I plan to run this passively and hopefully pay myself k per year. Your thoughts on the deal?
Am I over paying? Thank you in advance for your feedback. Hi CM, Actually, I think the asking price is fair. Maybe even low which is concerning. The seller may be terrified of the ballot measure likely coming up for vote in November that, if passed, would allow grocers to carry full strength beer and wine. Is the store near a big grocery store?
You should probably look into the ballot measure and bring it up with the owner. Even then, there will be fire drills requiring your presence. Inventory and cash flow will be a challenge. Asking k Owner finance with k down Sales are k Cash flow is k Smaller store with 80k in inventory. Hi Ned, It sounds like a good money maker but, for me, the asking price is too high. Liquor store ownership works best as an owner-operator set-up. But, who knows, maybe the market is different in California and these are bargain prices. Cheers, JH. Hello Justin. Does that sound to good to be true?
They gave me father is sick 2 stores story. Very little inventory. Sales are shady only 6 month of excel type documents. No debt on the company. Around 40k a month give or take a few. But this is on an excel doc not taxes. Hi Justin, I recently bought a liquor store and wondering if there is a recommended POS for liquor stores. I did some research and seems like square POS is capable of inventory management and will alert if you are running low on inventory.
And square also save emails for customers and we can send them marketing emails as well along with promotional offers etc. We ended up using a Mac-based program called LightSpeed. It was pretty good but reporting was completely inadequate. I would keep going with the Square system until you run into a major problem. I am a student at Ohio University and we are creating a Business Concept for an alcoholic beverage store.
It would be awesome if I could ask you a few questions and just take up a little bit of your time. If you could shoot me an email I would love to throw a couple questions at you. We me and my husband are trying to partner up with my sister to buy a liquor store and we are trying to put an expense sheet together and just wonder if you can help me with the payroll questions. What is the overall average payroll expenses percentage per gross sales for a 2mil gross sales? How much does a store manager make?
My sister will be just investing, she will help out during holidays or few weekends but my husband and me will be the one managing the store and work at the store. Figure less in years , maybe more in years if volume is steady or increasing. Hello Justin, I stumbled upon this blog and thanks so much for all the gracious advise you are giving out! My husband and I own a micro-distillery in Oregon.
At a glance it appears the regulation structure is relatively similar to Colorado. Judging by the Ducks hat you can probably confirm that. We have a national distributor but a this point, for now, our home state is left to us. This may change in the future but we enjoy getting out and introducing folks to our products which we are, of course, very passionate about. So far, this has mostly consisted of having a tasting booth at various events across the state.
My question to you as a liquor store owner, is do you have any advice for us as we begin the process of contacting individual liquor stores here in Oregon to discuss our products and offer our time to come and provide some tastings to their patrons? Is there sort of a standard way most distillery owners do this? Are there currently any good passive ownership businesses in Pueblo? Perhaps a carwash or Laundromat? Do you have some websites you could recommend I look at for opportunities in Pueblo or Southern Colorado.
Hi Jay, you can check for business listings on BizBuySell. The best opportunity for a passive ownership business, in my opinion, is real estate. Rental houses, apartment buildings, commercial buildings, etc. Does liquor store owners get together : so one buy I dont know bottle of Bombay and the other buy of Smirnoff and they split the cost so they have better price, low inventory and more variety?
Justin — Thank you! So, I would ask you the following. How would you evaluate the following business. Hi Justin thank you for the load of info. Yes, I think the high-end of the ratio is the right starting point. People shopping for wine are likely to make convenience purchases of standard beer and liquor offerings from time to time. Might as well accommodate them with a limited inventory.
It also creates value for some liquor store owners in what would otherwise become vulnerable locations e. I think it will work out okay. The new legislation has minimal impact on me because I sold the liquor business a while back and my only connection is via real estate. First i want to thanks for all your info and caring about people.
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Hi Terry, Good question. More is better. My wife and me work in Houston and would like to move to Denver Area as we are almost done with the Texas heat after living here for 10 years :. My wife would be quitting her job to run this startup full time and I would be able to help on the weekends as well. We have over k cash that we would like to turn into a 90k net a year. Can you please advise on which areas we should be narrowing down to-Boulder,Golden,Lakewood,Westminister are the first ones that come to our mind but we are open for suggestions.
Hi Mac, I think the areas you listed are all good prospects in terms of high growth areas. I think you might want to include Colorado Springs. Denver housing prices and traffic have gotten a bit out of hand and I think Colorado Springs and Pueblo will benefit long term if Denver continues to morph into LA. Hi Eve — congratulations! No easy feat creating a million dollar business from scratch. Well done! I see a lot of liquor stores for sale advertised on BizBuySell.
You could also advertise with a local realtor and list the business for sale. Do you own the real estate as well? Good Luck!! Hi Dee, Great idea. Hi Justin, I posted on your blog few mins ago. Just checking to see if I can post this message or not. Hi Justin, Your blog and posts are extremely valuable. Excellent work and thank YOU.
The area is all black community. Avg salary is low as per city data. The current owner is running this for 22 years and the business is 40 years old. Annual Sales: , Cost of goods: , Gross operating profit: , Looks like an exciting opportunity! What sort of guidance?
Just wanting to know if the price is fair? Anything in particular I have notes from this blog already to look into this property and business? I would start by getting a local realtor to do a market analysis on the real estate. Maybe New Jersey has different regulations that make the license worth more. I have no idea how to value the check cashing business. I would ask for a breakdown of the various components so you can understand their math and negotiate with a more complete understanding of each piece of the puzzle.
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Thank you for your story. When you are the face of the business it holds you to a higher sense of responsibility. Thanks again. In the state of Ga, is it legal for a distributor to make you purchase one item, in order to have the option to purchase another item? Where I live just went wet. We were the largest dry city in the state. The store on the city limits does k per month in beer, liquor, snack foods. My question is a first to market a good approach here? If you need good information you should visit this site here.
It is a big challenge to every liquor industry in selling their liquor product; big name […]. Hi Justin.. We have narrowed our choice of industry to just 2 or 3, with liquor stores being one of them we live in Washington, DC.