Most successful and profitable restaurants obtain a liquor license to sell alcohol. No doubt alcohol sales can boost restaurant profits substantially because hard liquor, beer, and most wines generally come with great profit margins.
According to Bloomberg Businessweek, for most restaurants, alcohol sales account for around 30 percent of their revenue.
There are exceptions: one of the most profitable restaurants in America, Tao Las Vegas, makes 75% of its income from alcohol sales!
Also, keep in mind that in the context of labor costs, the serving or preparation of alcoholic drinks involves much lower hourly volume expense. It’s a lot easier and faster preparing a martini than a hamburger sandwich with fries. How can your restaurant get all these benefits? First and obviously, you need a liquor license. And how to get a liquor license for your restaurant?
Just read on.
What’s a Liquor License?
Simply put, a liquor license is a permit to sell alcoholic beverages.
Sounds simple and straightforward enough, but the thing is… there are various types of liquor licenses, and you will need to understand what kind of liquor license you’ll need. Also, based on where your restaurant is located, you’ll need to know the laws that govern the grant of these liquor licenses before you even worry about how to get a liquor license.
Clearly, there are two things you will have to take into serious consideration as you map out plans to set up a restaurant business and apply for a liquor license:
- There are costs involved that could greatly impact your planned budget (depending on which city and state your business is located in). A business loan for your restaurant can be a great move to get the capital you need for your liquor license.
- It’ll take time to get your liquor license.
You may opt to open your restaurant to the public serving food and alcohol at the same time (planned well to coincide with the license release), or you may run your business serving only good food initially but ensuring space and provisions to accommodate a small, cozy bar while waiting for your liquor license. Either way, it’s a smart move to think and plan this through well.
How To Get a Liquor License for Your Restaurant
Each state in the U. S. has its own laws and requirements regarding the granting of liquor licenses.
In some states, there’s even a limit to the number of locations where alcohol can be sold at any given time. This naturally makes it quite difficult for new bars, pubs, and restaurants to get a license right away.
What to do?
Do some homework. Research the liquor laws prevailing in your specific city and state. Here are the basic steps:
1. Contact your local ABC agency to understand the process
Every state in the U.S. including yours has its Alcohol Beverage Control (ABC) Board, which regulates the sale of alcohol in your area. These are also the guys you will need to touch base with to get a full grasp of your state’s laws and the process of how to get a liquor license for your restaurant.
They can also give you information regarding restrictions on alcohol sales – the hours you can sell, to whom you can sell, at what age, the number of drinks per customer, and the corresponding fines and penalties for each respective violation.
2. Make sure you know where you need to apply (could be both your State and county)
3. Fill the appropriate forms and submit them
4. Provide the needed documentation, such as Employee Identification Number, certificate of incorporation, company constitution, etc.
How Long Does the Process Take?
Again based on where the business will be put up, the process of getting a liquor license can run from sixty days to as long as nine months, sometimes even longer.
The process can be lengthy so apply as soon as you’ve made up your mind.
In most towns or cities, your license application will have to first go through the town council. The license application is discussed, opinions voiced, recorded, and taken into consideration. Upon the town council’s approval (which takes time), this proceeds to the state for their ultimate okay.
Some towns and cities have a liquor license quota. If this has been reached, you may not be able to get a new license. You’ll have to check with the Department of Alcohol Beverage Control in your state.
If you couldn’t get your liquor license because your locality’s quota has been met, you could buy a liquor license from another restaurant that is closing.
How To Get a Liquor License by State
Here’s a brief look into how this thing works in some states. Your restaurant business may or may not be located in any of them, but this will help you have a better understanding of the process of getting a liquor license:
How to get a liquor license in California
Here, you’ll have to be running your business following California ABC laws, rules, and regulations. Mainly you’ll be dealing with California Code, Title 4, which references business regulations during the process. Check out their website if you’re putting up your restaurant anywhere in California.
How to get a liquor license in Florida
The Division of Alcoholic Beverages and Tobacco of the Department of Business and Professional Regulation grants liquor licenses. Still, before you approach them, you need to make sure what type of license you need.
How to get a liquor license in New York
The New York State Liquor Authority handles the liquor licenses in this state. It runs the show guided by eleven articles about liquor licenses, which you will find on their website.
How to get a liquor license in Texas
The Texas Alcoholic Beverage Code determines the granting of liquor licenses. It’s on their website where you will find the answers to the common questions that crop up when restaurant and pub owners are at the stage of getting a liquor license.
How to get a liquor license in Washington
In this state, the Washington Liquor and Cannabis Board is in charge of liquor licenses. You get a liquor license by securing first a liquor endorsement on your restaurant business license, managed by the Washington State Department of Revenue Business Licensing Service. In other words, if your restaurant is in the state of Washington, you will be dealing with these two separate but related agencies throughout the process.
How to get a liquor license – Other states
If your restaurant is not in any of the foregoing states, your best bet will still be to get in touch with the Alcohol Beverage Control Board of the specific city and state you’ll be doing business in.
Types of Liquor Licenses
Across the hospitality industry, various kinds of licenses for liquor are handed out. Some will allow the sale of only beer and wine. Others allow only hard liquor. The most common types of licenses for new restaurants, pubs, and bars are:
- Beer and wine liquor license – It’s what it says. You can’t sell any hard liquor or spirits.
- Restaurant liquor license – This one is the most common and is known also as an all-liquor license (this, in all likelihood, is what you need)
- Tavern liquor license – It’s for businesses that serve food but whose sales are beyond 50% liquor
- Brewpub liquor license – Planning to brew your own brand of beer or wine? This is the license you need.
How Much Does a Liquor License Cost?
Depending on which state you will be running your business, an all-liquor license could cost as little as $500 to as much as $70,000. So, it’s a smart move to consider establishing your restaurant in a city that’s friendly to outfits that serve alcohol, meaning towns and cities that don’t require permits and fees that’ll cost you an arm and a leg.
Find out here How much does it cost to run a restaurant
Make the Best of Your Liquor License: 10 Tips for Restaurant and Bar Owners
After getting your liquor license, give yourself a big pat on the back. You’ve earned it!
And then… be aware too that you will have to comply with all the rules and restrictions that are enumerated in the ABC Act, which you will find in the Department of Alcohol Beverage Control website of your state. You will be required to renew this license yearly which, as sure as the sun rises every morning, comes with another fee.
Sometimes though, if you’ve been a good boy, enjoying good standing with the ABC Board, this fee is reduced.
Once you obtain your liquor license, you should also make the best of your investment with these simple techniques:
1. Set up a bar area
If you have enough room in your establishment, set up a well-stocked bar, preferably close to the entry. Not only it will attract customers who visit your business just for a drink, but also it will make the waiting time more enjoyable for those who have to wait for a table during peak hours. They will have fewer chances to leave your restaurant when it’s full. Read here more tips on how to design your restaurant to make the best of your available space.
2. Offer a happy hour
Whether you have a restaurant, a bar or a pub, this is a bullet-proof technique to attract customers. It’s up to you how you decide your happy-hour drinks, but keep in mind that some establishments offer half-price options on some selected drinks.
3. Train your bartenders to upsell
Upselling drinks in your bar should be a matter of suggesting your clients a better-quality liquor instead of the house one.
4. Watch your waste
Be mindful of the number of cut lemons or other garnished that are discharged at the end of the day. Your bartenders should use measure pourres when preparing drinks. Train them to use always the same quantities: this will also guarantee the consistency in the product that your regular customers enjoy.
5. Make your own ingredients
House-made purees, syrups, and mixes are not only better-quality but can save you hundreds of dollars in the long run.
6. Know the difference between well (or house) and call
Train your bartenders on what bottles to use when serving house liquor. While these are a cheaper option than call brands, don’t underestimate your customers by using the lowest-quality liquor on the market.
7. Serve beer on tap
Many customers prefer this option rather than bottled beer. You can associate with a local brewery for discounted prices.
8. Offer a simple but eye-catching drink menu
Don’t overwhelm your customers with too many options. Your menu should be reduced, well presented, and divided into categories. A simple menu will also make it easier to keep your bar stocked. Read here for more tips on menu design.
9. Offer food and wine pairing
Some customers won’t mind spending a few extra bucks on a high-quality bottle if you guarantee their selection is the perfect choice for the dish they are tasting.
10. Create a signature drink
Your signature drink not only should taste good: it has to be visually attractive, be easy to promote through marketing, be priced reasonably, and easy and quick to prepare.
A liquor license can give you the boost you need!
As you can see, getting a liquor license can greatly increase your profits and grow your business.
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