Liquor stores are considered risky businesses by conventional financing institutions. They are, therefore, turned down from receiving cash advances. Merchant cash advances, on the other hand, do not discriminate applicants based on the industry in which they run their business. The only criteria that merchant cash advance depends upon is the previous sales statements of the applicant. These statements are used to make an estimate of expected future sales as the repayment is dependent on the sales made. This article details what one can do with liquor store purchase financing.
essentials that are often costly
Running a liquor store is not as easy as it sounds. All the essentials required to run a liquor store are expensive. From the commodity (liquor) to the setting (refrigerators, couches in the waiting lounge, display cabinets), everything is expensive. Given the high cost of operation, resorting to merchant advance as a means of small business finance for liquor stores will help cover these high costs until enough revenue is generated to pay for the costs.
of legal fees for obtaining licenses
One cannot run a liquor store without appropriate licenses. Moreover, every liquor store is also subject to the specific laws in the State it is located in. These laws have to be complied with to maintain the legality of the store. It is wise to hire the services of a legal professional to ensure that compliance is complete. These costs are not repeated frequently and can be covered by liquor store purchase financing options like merchant cash advance so that the working capital does not run dry.
costs of promotional events
promotional events are the best way to secure more customers to a liquor store.
These events can be spaced out across the calendar to improve sales. Attractive
decorations, colorful fliers, free samples, etc. are tried and tested methods
of garnering customer interest and increasing the footfall in the store. The
costs for these events can be covered by means of small
business financing for liquor store like merchant cash advance.
Liquor stores are a great business as they are considered almost recession-proof and also because consumer demand tends to remain fairly constant with the added benefit of high seasonal spikes. However, it is a highly regulated industry where customers demand specialist knowledge and look to their local liquor store to provide guidance, recommendations, and an extensive product range.
Apart from ensuring that the shop is staffed with knowledgeable employees, owners also need to invest in a vast inventory to cater to expensive and diverse tastes and all this can be costly!
But with a business model as stable as a liquor store, getting financing from alternative sources is no problem at all! Here’s a look at how owners are leveraging liquor store business financing to run and expand their businesses.
- Upgrade or expand the store – There are several small business finance options for liquor stores such as a short-term merchant cash advance or a large expansion funding deal, which can be used to grow the business. These accessible financing offers can be used for activities such as buying diversified stock, laying on extra inventory to meet seasonal demand like buying more expensive wines for Christmas or taking the business online.
2. Commercial real estate financing – The buying trend seems to be in favor of mega liquor stores. So if there is a big store competitor in the neighborhood, then the only way to stay competitive is to grow in size. Commercial real estate financing is specifically designed to help business owners buy or lease land/building space to expand their businesses.
3. Working capital financing – Stocking up inventory, keeping experts on the roll, along with insurance payments, utilities, license fees, etc. can all add up to become substantial fixed costs. At times when cash flow runs low, a liquor store purchase financing can be used as working capital to ensure all the essential payments are met on time.
Regardless of good times or bad, people drink. Some would say people drink more when times are tough! But this doesn’t mean that a liquor store is not a demanding business to run. There is plenty of competition, consumer tastes and buying trends are constantly changing, and there is a lot of government oversight to deal with. Having access to easy, flexible, and fast liquor store business financing can be a big help to run liquor businesses smoothly AND to grow.