4 Ways to Use a Liquor Store Loan
In this post, we’ll review four ways that you can utilize business funding to grow your liquor store.
How Can You Use a Loan for Liquor Store Growth?
1. Hire Additional Employees
As you likely know, being understaffed can be extremely detrimental to your business. You need employees who can assist customers, restock inventory, and manage the register, just to name a few examples.
In addition, if an employee is sick or on vacation, you’ll need someone to cover their shift. If you’ve noticed that your store has been understaffed, you should use your loan to hire additional staff members.
2. Purchase More Inventory
There’s nothing worse than having customers visit your store, only to walk out empty handed because your shelves aren’t fully stocked. Many liquor store owners run into inventory issues because they can’t afford to place larger orders, or they simply don’t want to spend invest in more options. Sadly, this can be a crucial mistake. If patrons realize that other local liquor stores have a wider selection, they probably won’t return to your establishment.
To avoid this, use your small business loan to order more of existing inventory, or purchase new options. You could also offer glassware, gift bags, corkscrews, and other accessories that can accompany liquor purchases.
3. Open Another Location
If your liquor store is already profitable, you should consider how you can continue increasing your sales. One way to do this is to open an additional liquor store. By opening another location, you might be able to serve more customers, potentially in a different geographic area.
Of course, opening another liquor store comes with plenty of expenses. You’ll need to pay for rent, or purchase commercial real estate. Then, you’ll also need to afford utility bills, interior décor, payroll, and more inventory. Naturally, to pay for these costs, having business capital can be imperative.
Although you’ll want to invest in your new store, it’s important that you don’t neglect your existing establishment. With a term loan, you can make investments in your new location without dipping into your original store’s cash flow.
4. Increase Marketing
If your liquor store isn’t profitable, you should focus on acquiring new customers. Using your business loan, you can invest in different marketing ideas, such as:
- Online advertising
- Register for business listings
- Print advertisements in local publications
- Radio advertisements
These are just a few examples; there are numerous ways to promote your liquor store to nearby patrons. Since you have a loan, you’ll be able to try different marketing ideas, and then can invest in the strategies that are most profitable.
Other Liquor Store Financing Options
Although many liquor store owners pursue term loans, there are other working capital options that you can pursue.
- Credit Cards: With a business credit card, you can charge expenses to your account (and depending on the card, earn rewards in the process).
- Merchant Cash Advances: Most likely, your liquor store accepts credit card payments. If this is the case, you might qualify for a cash advance. With this type of financing, you’ll receive a lump sum, in exchange for a percentage of your store’s future credit card sales.
- Business Line of Credit: Depending on your financing needs, you could apply for a revolving or non-revolving business line of credit.
- SBA Loans: If you haven’t been able to qualify for other financing options, you can pursue SBA financing. They offer different loan options to U.S.-based businesses that have exhausted traditional funding sources.
How Will You Invest in Your Liquor Store?
Now that we’ve explained how you can utilize liquor store financing, consider how you can improve your store. Every business is different, so you should determine the areas in which your business needs to be upgraded. Don’t be afraid to ask your existing customers, employees, or other business owners for their feedback. This can be very useful as you prepare to invest in the future of your store!
Editor’s Note: This post was updated for accuracy and comprehensiveness in June 2019.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.