Buying Wine Shop

[onthemoon]

My wife and I are considering buying a small wine shop that’s for sale near our house. I own a bookkeeping business so I would continue doing that while working part time at the wine shop while my wife works there part time as well (we have a 2 year old).

The wine shop is for sale for $85,000 and is currently only netting the owner $30k/year (likely why they’re selling). We see lots of growth potential (selling wine accessories, doing more tastings and classes ect.) While I’ve run a successful business before, I’ve never worked in the wine/retail industry but my wife and I are passionate about wine. The current lease ends March 2027 which I like because we’d have about 2.5 years to turn a decent profit or else we’d shut it down when the lease ends.

Are we crazy?

 

[bso66]

@onthemoon Is that $30k net with a manager in place, or owner-operated? If it’s relatively passive, it’s a steal. If not, could be a really fun hobby business until you increase sales enough to hire a good manager.

I also have a bookkeeping company and one of my clients has an ice cream shop that also has a beer and wine license in a high foot traffic area. Sort of a “treat for kiddo and mom/dad” concept. Wildly popular.

Anyway, the owner was telling me that he has had some rich clientele come in regularly that are very into fine wine from all over the world, and he has set up a second revenue stream taking orders from these folks of exactly what they are looking for and sourcing it for them by the case.

Might try to find the wine snobs in the area and bring the best in the world to their front door for an added revenue boost.

 

[sng092]

@onthemoon Is delivery available in your area? I used to deliver tons of liquor when I worked for instacart, so I know its possible. A big ass billboard that says, "wine directly to your door!" Would probably move some bottles.

 

[onthemoon]

@sng092 That’s a great idea. Thank you!

 

[jidavy]

@onthemoon What's the population of the city?

 

[onthemoon]

@jidavy I’m in Raleigh, NC. So pretty large!

 

[kck]

@onthemoon So many variables which would make me decide yes or no on this decision. One big thing is how much cash you have to pump into the business. Most states the popular wines you need to buy quantities of to get good prices. Even worse some states all you to mix and match varieties while some states make you buy deal of each and every variatel to get best prices.

Kendall Jackson Chardonnay, number 1 white wine in the US lets just say top deal is 25 cases. 25 cases × 12 bottles a case 300 bottles you must buy. Say your cost st top deal is 8 bucks a bottles so 2,400 investment into 1 item. Now some months they will have it "off deal" for a couple months so now you are forced to purchase a couple months worth of inventory at once.

Ive helped setup or run some wine stores with as low as 600 SKUs and some with over 5,000 SKUs. The biggest mistake I see like many other businesses is under capitalization. You need to have cash on hand ready to buy these top deals in order to be profitable. If you don't buy the top deals and have competitive pricing you are already going out of business.

What does the books look like over the last 8 years? My guess would be a steady decline since covid. Alcohol overall including beer is trending way down. It's a risky business to get into right now but def profitable if done correctly. If it's liquor also I hope you have deep pockets. Jack daniels will cost 40k, crown royal 20k, smirnoff 6k, titos 10k and the list goes on.

One trend that seems to be getting larger is non alcoholic wine/liquor. I def recommend having a larger selection than your competition.

 

[triphip2]

@onthemoon If you have the population in the area I would go for it!

 

[richardfulham]

@onthemoon Even could consider local/nearby events companies who might require consistent wine orders for networking mixers.

I like it because plenty of people consume wine and you're a BK ,so there will be no foolish decisions made.

Go for it, I say.

 

[trendymom2]

@onthemoon Sounds like it has potential and it's good that you own a bookkeeping business so you understand the numbers.

Does the purchase price include the current wine inventory?

 

[onthemoon]

@trendymom2 It does. $35,000 worth of wine inventory.

 

[trendymom2]

@onthemoon Even better.

You mentioned they're likely selling it because they're only making $30k/year. I'd dig into this a little more to make sure their isn't anything else going on with it.

Either way, good luck!

 

[bolingbroke]

@onthemoon Why is it so crazy cheap? Seems too good to be true? Is that $30k net assuming the owner pays himself nothing?

 

[gazelle512]

@onthemoon Maybe ask in wine reddit any specific questions to ask before purchasing a wine shop. Probably could get some good advice

 

[jdwessinger]

@onthemoon Do they have employees? It’s really different if that’s $30k after paying employees and you can add value with your and your wife’s efforts or $30k and they are doing it all because now you need to put in 50-60 hours/week between to maintain the status quo before you even start to think about the efforts to grow it

 

[kamga]

@onthemoon Do it!

 

[meganbree3]

@onthemoon Off topics but are you looking for any employees for your bookkeeping business? I’m in Raleigh and just graduated with a degree in Finance. The job market is tough right now.

 

[onthemoon]

@meganbree3 I’m not currently but that could always change. If you can, send me a PM so I can get your resume.

 

[bmh3d]

@onthemoon Wine sales are dropping everywhere and there's is no reason to expect a reversal.

I'd seriously investigate the market before putting money into it.

selling wine accessories, doing more tastings and classes etc.

TBH, wine accessories will have you competing with amazon and getting people to pay for classes or tastings will be difficult.

Are we crazy?

Yep.

 

[yurtal]

@bmh3d You can say that you’re competing with Amazon for any retail store.

Some people, myself included don’t care about saving a few bucks per item if it means getting out the house and buying something immediately. Bonus if the customer service is great.