How To Start A Liquor Store Business In The Philippines: Before we begin, it’s important to answer some of the most popular questions when opening a liquor store business in the Philippines. One of these questions involves the total capital needed.
In other words, how much does it cost to start a liquor store business in the Philippines? The total capital needed will depend on several factors, including the size and scope of the business. Nevertheless, a budget of 125,000 pesos is recommended for a small store.
Another common question is… is a liquor store business in the Philippines profitable? Due to the low maintenance costs of the supply and business expenses, a liquor business can be profitable; however, liquor is highly accessible across the Philippines, which poses many risks for business owners. These risks can impact the overall profit a business owner earns.
Table of Contents
How To Start A Liquor Store Business In The Philippines
1. Create A Liquor Business Plan For The Philippines
When looking at how to start a liquor store business in the Philippines, you will need to create your business plan, including your objectives and strategy.
There are several liquor business plans for the Philippines that can be downloaded. Nonetheless, Filipino wealth has a free downloadable business and financial template that can be downloaded by clicking on the Tools tab at the top of this page.
Recently we discussed how to open up a bar in the Philippines and briefly discussed operating a nightclub business in the Philippines, and these articles have some similarities to a liquor store business, and therefore it’s highly recommended to visit our full article with some added information and statistics.
If you are creating a business plan yourself, here are a few points you may wish to write down…
- Are There Any Liquor Suppliers In The Philippines That I Can Work With?
- Do I Have An Emergency Plan Or Enough Capital?
- How Am I Different From Other Liquor Stores?
- How Can I Make More Money From This Business?
- How Much Profit Will I Be Making?
- What Are The Legal Requirements To Open A Liquor Store Business In The Philippines?
- What Are The Threats And Opportunities Within The Market Currently?
- What Skills Or Experience Do I Need?
- What Type Of Liquor Will I Be Selling?
- Where Will My Location Be And How Will This Affect My Customers?
- Who Will Open Up The Business And What Times?
- Why Will Customers Choose My Liquor Store And Not 7/11 Or SM?
- Will I Have Security On My Building?
- Will I Market My Business If So Who To And How Much Will This Cost?
Many of these questions will lead you to want to conduct market research, and this is our next stage on how to start a liquor store business in the Philippines.
2. Research The Market, Suppliers, And Requirements
Market research is so important to a new business that it’s a topic we have explored heavily in one of our recent articles.
When opening a liquor store business in the Philippines, it is best to research the market suppliers and requirements needed to operate a liquor store business. First, let’s take a look at the market.
It is best to look at the liquor market as a whole (nationwide) and the liquor market in the city or province where you are starting your business. For example, is there a decline or incline in liquor stores across the Philippines? How about your business location… is there a current demand for liquor, perhaps promotional liquor or liquor with food?
This stage is not opinion but more about data and statistics. However, speaking to the local community can be very beneficial when starting a liquor store business in the Philippines.
According to Statista, In 2019, 33.3 percent of the surveyed respondents aged 60 to 69 were alcohol drinkers in the Philippines. In the same year, 49.4 percent of men and 14.8 percent of women among the aging population were alcohol drinkers. The World Health Organisation also has some fantastic statistics on alcohol consumption.
These data points will allow new business owners to plan the business carefully. For example, if you decide to target the retired community, then certain beverages and offers may be more suitable for them, leading to more customers and more profit.
Another area of research is the suppliers. The cheapest and most convenient way to purchase alcohol in the Philippines is to purchase from local wholesalers, and there are several to choose from. I’ve added a few external websites on the hyperlinks above for more information.
The last section includes the requirements. The requirements to open a liquor store business in the Philippines is also a popular question. There are several laws that business owners will need to follow. Some are general alcohol regulations, while others protect a certain age group, such as children.
For example, presidential decree no. 1619 section 6 states – The sale of, and offer to sell, to minors of liquors or beverages containing an alcoholic content is hereby prohibited and shall be punishable by imprisonment ranging from 6 months and 1 day to 4 years and a fine ranging 600 to 4000 pesos.
The FDA also has laws such as Circular No. 2019-006. This circular is more about the general selling and packaging of liquor.
In Quezon City, the Liquor Licensing and Regulatory Board (government department) have a full 16-page guide on alcohol. So naturally, depending on your location, your business may need to follow additional requirements.
To stay up to date with the latest information, it is often recommended to contact the FDA, the local business government office, and a local attorney. Setting up an alcohol shop in the Philippines can be slightly complex.
3. Choose Your Location And Register Your Business
Registering a business in the Philippines is a fairly simple process. Still, it can take several weeks and, in some cases, longer, and therefore, you may wish to register your business before or after this stage.
What is important, however, is that you have a physical location. Not only is this needed for your business, but it is also needed for registration purposes. Therefore you may wish to spend a considerable amount of time investigating options on where to open your store.
Accessibility and affordability are two important factors. For example, in the city center, you may find that accessibility is high and customers find out about your business without much marketing. However, if you are in the provinces or outside the city, you may find accessibility slightly lower.
The cost to open a liquor store business in the Philippines is also an important factor. The location is perhaps one of the biggest expenses in the alcohol business, and therefore, you will need to determine the balance of affordability vs accessibility. If you can find a highly accessible location with an affordable price tag, this is the ideal win-win situation.
4. Buy Liquor Supplies, Equipment, And Stock
Earlier, we spoke about the requirements to start an alcohol business in the Philippines and touched upon several liquor suppliers. At this stage, your liquor business is registered, and you have a location, so the next stage would be to buy your supplies, equipment, and stock.
What type of alcohol will you be selling, and how much should you purchase? This is a difficult question, and it depends on your location and customer base. Working with local alcohol suppliers may not be the cheapest option, but they are useful, especially if you need alcohol quickly.
Apart from the alcohol, there are also other options available. For example, are you selling additional items such as cigarettes or something common with liquor?
Some business owners also create a side room, almost like a small bar where customers can sit and drink.
5. Create Local SEO
The most challenging time for any business is at the start. Unless you have marketed your business, not many customers will know that you exist, and this is where awareness and local search engine optimization comes in.
Local search engine optimization is much easier as you target a specific area with less competition. Creating a business on Google Maps is often one of the first considerations business owners make. Most customers looking for a new shop or restaurant use Google Maps before leaving the house.
But with local search engine optimization, you don’t need to stop there. You can also create social media pages and register with other large websites so that your customers can find you much easier. You can even outsource this work! There are some fantastic services on platforms such as Fiverr that can be used.
6. Marketing And Reinvestment
The last stage of opening an alcohol business in the Philippines is growing your business through marketing and reinvestment.
One of the biggest difficulties experienced business owners face is change. Large corporations can offer alcohol at an affordable rate as they buy in bulk directly from the supplier. In addition, some suppliers have increased their prices over the years, making the profit margin slightly lower.
These are industry changes but will happen every year in every type of business, and the best way to stay successful is to change with the times. This is where reinvestment comes in. Reinvestment is not just on the business growth but also on changing the business to better suit the customer.
Can you offer a different kind of service (home delivery, for example) that would make your business stand out from the crowd?
Marketing soon follows. Your customers need to know that you exist and have the products they need. The great news is marketing is not always so expensive, but strategic marketing is often what is required if you are looking to reach a large number of customers with fewer expenses.