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Are you planning to open a wine shop? There is no doubt about the health benefits of wine and in recent times have been widely reported in style in the North American media, one of it is The “Oprah Winfrey Show” and the popular selling book “French Women Don’t Get Fat”

Most of the events you attend today, there is the probability that wine must be served and the demand for wine all over the world keep on increasing, probably because of the importance of it in an event and also because of the health benefits associated with it.

Getting in the wine business may mean selling wines to individuals within your community, to Clubs, Bar, Weddings, Birthday parties, etc. It may also mean going into one or two parts of the wine business. You could decide to have a physical retail shop, or a supplier selling to retailers and wholesalers. You could also be a direct importer of wine particularly if you are in a developing country like Nigeria.

It is also possible that you become a wholesaler selling to retailers in large quantity, or you open a wine bar where people of the different class come to meet new friends or strike business deals over a glass of wine. Whichever way you decide to go into the business, the probability you will make a profit is not in doubt. What you need is to have the passion and dedication to succeed in the wine business, and you will gradually get to the Promised Land.

First, before you get into the line of wine business proper, you would need to be aware of the different types of wines. Take a book or two specifically about wine, read articles, magazines that discuss wine, then talk with Wine savvy people what your plans are to start up a wine business, as luck would have it, you will probably get one or two pertinent information concerning wine business.

Know about the product you want to sell inside out, in terms of flavour, alcohol content/percentage, customer’s preference, and prices, wine producers, and any other possible information you can get about wine.

Seek out for information – offline and online about wine in general. Meet with experts in the wine business and others who have been in the business for a while and get all the ideas/information you can from them. The knowledge you gain from your enquires will put you in good stead when you launch your wine shop.

Moreover, before you launch your wine business, you could do further research on the type of people living in the area and the physical movement of people in order to find a good location for your wine shop. You could carry this exercise yourself or get a professional researcher to do it for you. You can begin this exercise by sampling wine shops in your locality where you intend to locate the shop to see the level of traffic in and out of the shops on a typical day during official selling hours. Record the movement of people that enter wine shops, to see the types of wine they buy, quantity and the method of payment used to settle bills. Carry this exercise in many streets within your vicinity to give you a clue of the movement of people and the transactions carried out on a typical day.

The location you eventually select must be within an area mainly populated by the upper and middle class because this set of people has been established to be the consumers of wine since they can easily afford to buy the drinks.

Conduct research on your potential suppliers – producers of wine and other distributors who will serve as your suppliers. When they are discovered, pay them visits and begin to discuss terms and conditions of sale. It is best, of course, getting your wine directly from the producers since the price is likely to be lower, but for a regular supply of wine you need to negotiate with distributors and wholesalers.

 

How To Start A Wine Shop Business

• Create a business plan
• Establish the initial and ongoing expenses for a wine shop:
• Choose a name for your wine shop and register it.
• Skills and experiences required in the wine shop business
• Register for taxes, procure insurance and obtain necessary permits and licenses.
• Open a business bank account and credit card
• Set up your web presence:
• Create your brand
• Market your wine business
• Grow your wine business
• Conclusion

Having decided to go into the business of selling wine, with the passion and determination that success demands, and having done some of the things listed above, you can now set up your business and manage it properly to achieve your objectives. But before you launch your wine business proper, you must draw your road map (business plan) and map out strategies to guide you in achieving your profit goals. The reasons for your business plan may be obvious but it may include the following:

• For selling your idea to relevant interested parties ( eg. Financiers)
• To convince bankers to obtain a loan.
• To obtain local government or other groups financing
• To seal joint venture arrangement with, e.g. wine producer (strategic alliance)
• To obtain business contracts of relevant groups.
• To attract major human resource/personnel in the area of marketing.
• To tie up mergers and acquisitions if need be in the future
• To encourage and direct your management team

Read Also: How to Get and Start Entrepreneur Ideas while Working Full Time

The business plan should formally be presented to convince interested parties and attract financiers. It may contain the basic information to reduce the bottleneck business people often go through when seeking financing.

1. Create a business plan

• Table of contents – This enables the reader to quickly find the exact information being sought.
• Executive Summary – These summaries the entire business plan and is expected to cover the following major issues.
• The company background – when started, new or old company and the current situation concerning how the business is developing?.
• The nature of the wine to be sold – red/or and white wine, whether to sell wine in a shop and to have wine bar as well.
• The potential market – Which are the potential markets? The potential market may comprise of the middle and upper strata of the society because these groups are assumed to possess the purchasing power required to consume wine.
• A projected financial summary (profit/loss account and balance sheet) this will represent the expected income and expenditure and whether the wine business is going to be profitable.
• The management team – This is going to include the people that are going to be employed to manage the business. It may also be going to include those who are non-executive, but may have been invited into the business for their expert knowledge, information resource, have relevant people in their network or  they are capable of providing investment finance
• The financing policies and strategies – How is the wine business going to be financed? Do you have sufficient savings or you are going to rely on the generosity of family members and friends? But if you are going to need external finance such as bank funding, this business plan presented in this formal way is vital.
• Company’s description  –  This describes the company in a general way, who are the brains behind its formation, how it is going to be financed, its mission and goals, values and the direction it is going to follow. It may also touch on the following briefly:
• Example:-

1. Why  the company was founded
2. How big is the wine shop business expected to be?
3. The company’s choice of product
4. Product viability – How viable is wine in the neighbourhood where the business is going to be located?
5. Markets penetrated – which market is expected to be penetrated first in the coming weeks and months. Which other markets are expected to be explored in the near future?
6. How long is it going to take you to break-even and begin to make a profit? Break-even means theoretically that income generated from the business and costs incurred in running the business are equal so that there is neither profit nor loss. You will find from the projected income and expenses when the business is likely to begin making a profit.
7. How much is to be invested at launching and in the near future?
8.   Marketing   – This informs the stakeholders how you want to capture the potential market segments using:

–    the price, distribution etc

–    Promotion tools necessary, advertising policies to be in place and ad strategies to be adopted..

*   Management ownership structure – Who are the stakeholders in terms of having a financial stake as well as being an employee.

• Competition – This section focuses on the strengths and weaknesses of other wine shops and where your shop is going to have an advantage over them.
• Financial statements and projections – These aspects deal on projected cash flows, financial forecasts, balance sheet. This is crucial if you want external funding.
• Appendices  –  This section contains details that cannot conveniently be included in the main plan, such as organization chart, extended market information, ‘resume’ of key personnel

2. Establish the initial and ongoing expenses for a wine shop:

Wine stores typically sell to their customers per bottle or based on quantity sales (e.g. volume discounts). Pricing may be controlled by state laws. A wine shop may typically have the following to pay for before opening for customers.

Initial and ongoing costs can include:

• One year lease for a standard shop:
• Administration costs:
• Wages for three employees:
• Tastings on monthly bases:
• Cost of Inventory:
• Marketing and promotion:
• Cash at hand and in the bank for miscellaneous expenses:

Since the above can’t be estimated with every amount of certainty, it is not possible to allocate a specific amount to each. So you are expected to research and negotiate for the exact amount for each.

3. Choose a name for your wine shop and register it.

You should choose a name that is suitable for a shop selling wine. You may choose a name that reflexes your personal name unless the ownership structure doesn’t permit this. Or if you have other shareholders, you may decide to choose a name that is neutral and compromise can easily be reached. Whatever name is ultimately chosen, it will be the same name that should be on your website or blog and all business documents.

Read Also: How to Generate Name for Business with Ease

Once the business name is settled, the name should be registered immediately to seal its legal status. Depending on the business structure, a business organization can be formed in the following ways:

Sole proprietorship – This form of business is best when a single person owns the business irrespective of the fact that many people share the responsibility of management.

Partnership – When two or more people own a business and have the business assets in common with a view to sharing profit and loss, you can choose this form of business.

Private Limited Liability Company (LLC) – When the owner wants the liability of their share of business limited to the extent that they will not be liable to the acts committed by the company. This means that shareholders will not be liable for further financial commitment to the business should the business be faced with financial turmoil. With this arrangement, the business is a legal entity separating the owner who formed it; it can sue and be sued in the name of the company.

Public Limited Company – This form of business is unsuitable for a wine shop.

4. Skills and experiences required in the wine shop business

Wine shop business can be run in a small or large scale. Chain stores such as Total Wine typically operate on a large scale by buying a large number of stocks that they suppose can attract a mass market. Smaller wine shops, however, look after enthusiasts who are typical may be looking for special tastes of wine.

Small wine shops usually are family owned and are located next to or on a vineyard. The wines usually are made in-house and are marketed in their store. If you plan to go into this type of set-up, you would have to buy a vineyard and must learn how to manage it if you want to make a success of your undertaking.

On the other hand, if you own a wine shop, you are not necessarily going to be so involved. Yes, you can run it on your own or get it run by wineries who understand the intricacies of the wine business. Under this arrangement, the winery will usually produce speciality wine and market it at discounted wholesale pricing for large quantity purchases. The retail store owners then mark up the bottles and re-sells them to the larger public.

5. Register for taxes, procure insurance and obtain necessary permits and licenses.

To operate your wine shop, you should register for state and federal taxes. To do the registration, you must obtain the EIN (Employer Identification Number) to enable your shop to be identified by the Internal Revenue Service.

It is important to procure insurance in order to ensure your stocks from fire, burglary or any other form of damage. Permits and licences are required to sell wine and liquor. All businesses involved in the sale of alcohol beverages are required by the appropriate state or local agency to operate under a license. Failure to comply with alcohol guidelines may cause your business to be shut down.

Certificate of Occupancy (CO)

Wine shops generally use physical location and as such require a Certificate of Occupancy (CO). A CO becomes necessary since it is the evidence that all zoning laws, building codes, and other government regulations have been complied with.

Therefore, if you decide to rent a retail shop, make sure the landlord has a CO. Watch out also that the landlord has obtained or capable of obtaining a valid CO that can suit your purpose. If in the course of time, you discover that your landlord has done major repairs to the building, he has to obtain a new CO. If in the course of working out to rent a shop, you found out that the shop needs a major renovation, you should ensure he obtains a new CO. You should ask him to add a clause in the agreement indicating that payment for rent will not start to count until a valid CO is procured.

But if on the other hand, you have the option to build or buy your wine shop, it is your sole responsibility to obtain a valid CO. Make sure all building codes and zoning requirements for your wine shop is CO compliant.

Read Also: How to Start a Babysitting Business

6. Open a business bank account

Opening a business bank account is necessary to separate your personal account from your business account. Without separating the two accounts, it is going to be difficult to sort out your personal receipts from the sales of the wine shop. Also, this is going to make filing of accounting and tax returns difficult if not properly separated..

Moreover for personal asset protection, keeping both accounts together puts your personal assets such as house, car or any other valuable item at serious risk should you be indicted.

7. Set up your web presence:

A business website lets potential customers learn and know about your business and the different types of wine you have in the shop. Customers will be able to learn about your business when you drag traffic to your site. You may even decide to sell wine online, so get ready for it before you decide for it properly.

In the first place, when setting up your site, craft it professionally if you can or contract with a professional web designer to produce an interactive website where customers can make useful contributions, ask questions and be given instant response. Use quality profile picture, catalogue of assorted wines and engaging contents, all geared towards attracting visitors.

When this is done, then use social media, with the help of your network to direct traffic to your site. Build wine enthusiasts who you will be inviting occasionally for evening get to know each other outing and wine tasting.

8. Create your brand

Your brand is your wine shop identity; it defines your values and what your business stands for. Your brand name is what customers know and can identify your business with.

You can craft a brand name based on your unique selling proposition (USP) or other values you have placed on your wine shop.

However, opting for a wine shop franchise can be a good idea for wine shop owners who would like to use an established model to sell its wine rather than beginning from scratch. If you decide on the franchise option, be ready to foot the initial bill while exercising less control over your business. But a quality franchise can lift you up by the initial and ongoing support, brand recognition and other marketing assistants you will be offered by the franchisor.

9. Market your wine business

Marketing your business revolves typically in the use of local advertising, newspaper and radio as well as printing and distributing flyers. In some states, advertising may be restricted and you are required to follow strict rules before you can promote your wine business. It is very important you offer quality customer service and hope to enjoy repeat and referral business from a loyal customer base.

It is also a good idea to feature on social media during a wine tasting, for example, and other occasions that will bring your fans together.

10. Grow your wine business:

Growing your wine store and making it profitable often involves identifying unexplored market and satisfying their needs and growing and expanding geographically. Identifying a niche or underserved market can be done by making formal and informal contacts with smaller wine shops and selected consumers. However, more successful wine stores usually have certain things in common. They always adopt the policy of selling wine at a discount and appeal to a mass market. An example is Total Wine who has embraced this approach and has been very successful.

Other wine stores have their own focus too. Their theme may be related to wines from a specific region of the country, but whatever theme you choose, try to keep competitors in your area at bay.

Read Also: How to Start Business Support Services

Conclusion

Starting a wine store is mainly for those who are wine enthusiasts and will be prepared to spend a lot of time working to stand their wine shop. It is a capital and labour intensive project and it is not expected to break-even in the first six months. So for you to achieve success in this business, you must have the passion and enjoy selling wine.

Foods and Healthcare

Tags: Business ideas, Food Business Ideas