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Would like to discuss the idea of investing in a SMALL liquor store operation. Also what are other's ideas on the latest and greatest "recession proof" businesses or categories. We are probably going to hit one no later than 2020 so I want to get ahead of the game. While my job should be safe (we are the fastest growing department in the company, Fortune 500, by that time I will have 2 years tenure) I would like to start building multiple streams of income. My accountant has formed an investment group so I am giving about $100 a month currently to that. That will be a long term play in addition to leveraging the 401(k) match which I just qualified for.
Now I need something I can really get my hands on develop recession proof skills that are a bit more local, under the radar yet sustainable. I am not trying to become a Liquor King and dominate the industry just want a piece of the pie. I would have one of my retired parents check in and help manage the storefront operation while I do the bookkeeping, maintain the permits, pay taxes etc. with the help of my accountant. Being now that they have liquor delivery services maybe we can integrate with Delivery.com and Drizly if the numbers look right or just do it through our own website.
Does or has anyone owned a Liquor Store, and have any immediate pros/cons. I saw one for $20k in Hartford, CT area. Between my Wife and I the budget is currently $25-50k. I know alcohol (come from a family of alcoholics) and I know Marketing. I also have watched a lot of a Bar Rescue. But is there anything I'm missing from a "retail" operations standpoint or any specific ordinances in the NY tri-state area I am overlooking that would add to the difficulty that I am not seeing? (I am NOT buying one in NYC 5 borough city limits as this market is too regulated and competitive, probably will be CT, NJ, Yonkers etc. Something I can drive or take the train up to check on once a month.
Any other recession proof business ideas? Or businesses that actually thrive in a recession? (No not interested in tobacco) Thanks!
1. coming from alcoholic family, are you Ok selling adulterated beverages? It's YOUR karma.
2. theft. You WILL be dealing with it.
3. in case of social turmoil - there will be not much left from it. Those get hit hard right away. As in - robbed.
I've watched friends fail with a liqueur store, not because they didn't work hard but, because their wholesale purchasing power could not compete with others. They had huge credentials in the wine industry, supported the community like crazy. Kept margins low to reasonable. Felt very sad for them.
Loss prevention should not be an issue in the areas I'm looking in (Middle class neighborhoods in suburbs of NY Tri-state area) The insurance should cover it and premiums should be low (I will be looking into that ahead of time).
Wholesale shouldn't be a problem as with my Marketing background I will be able to offer new and unique beverages that the Wholesalers (Budweisers of the world) will not be able to provide nor will they try to compete. My angle will be providing to the younger market that wants to sample different new brands.
Regarding Karma - I believe in and promote responsible drinking. But people are going to do what they will do. The same goes for any other vice. I will let AA leave cards and advertise, it is not going to affect Sales.
I do not get a good vibe from that niche. Is there something I'm missing? Have heard of a few friends in multiple countries get screwed over by pyramid schemes, fraudulent deals related to water redistribution. I would think the Mafia would have that tied up to a certain degree since it's so common.
Don't do anything retail. The hours/commitment are death. Open up something that allows you set up your own schedule. I know people who do onsite auto detailing, RE photography for RE agents, transfer cars between auto dealers.
I haven't been to a liquor store in decades. Living in Phoenix, Las Vegas, Tucson you can buy all your liquor in the grocery stores and Wal-Mart, and much cheaper prices. In my 22 years in Las Vegas, 2 liquor stores opened up in my neighborhood and both closed down. They just couldn't compete!
During the last Great Recession, 9 storefront evangelical churches opened up in vacant stores, within 6 blocks of my house, at one time, at one commercial strip, 4 churches right next to one another competing for worshippers, or customers? And now, only 2 remain!
If you open a liquor store in the hood, you'll make money. The margins on alcohol might be lower but you'll likely make up the bulk of your higher profit items in the form of soda, chips, candy, etc. People in the hood aren't going to price shop, they're not going to travel a few miles to save a few dollars if it's not convenient for them.
Another business that seems to be recession proof are pawn shops. Most of your profits will be in loans as the interest rates are sky high. You'll need a lot of cash on hand so I don't believe $20-25k will be enough but you could go in it together with someone else. You will need a vast knowledge about products and their values. You'll also deal with a lot of people down on their luck. The higher end items get listed online if your local market isn't going to pay for it.
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) Thanks!
