Pizza restaurants are often in high demand in a variety of towns, which may make it more difficult for your place to stand out. That said, it is possible to use a liquor license to expand your potential business opportunities and make more cash.
Alcohol Can Attract New Types Of Business
If your pizza restaurant is struggling to break out in a crowded market, you should investigate whether or not other places near you have a liquor license. If they don't, it might be a good choice to get one for your company. That's because a liquor license can bring in new types of customers and attract more people than you were before. For example, you might attract:
- College students looking for a hangout place
- People looking to sober up at the end of the night
- Parents who like a little liquor with their drinks
- Bar hoppers looking for a quick slice
You might have to extend your business hours to get the most out of your license because many drinkers are likely to be out after 11 or so at night. Doing so is likely to attract a maximum amount of people to your pizza restaurant. Before looking into a liquor license, though, you need to make sure you can afford one.
Balancing The Cost And Profit Margin
Liquor licenses are strange because their cost varies heavily from one state to the next. The wide range of prices is mostly due to whether or not your state is an open or closed one. Open states allow anyone who applies to get a liquor license. As a result, you may pay as little as $300 for a liquor license and get it as quickly as five months after you apply.
However, closed states have a limited number of liquor license and require you to buy them from somebody who already owns one. As you can imagine, this will cost you a lot more money, up to $14,000 or more. If your pizza place is already struggling to make ends meet, is this investment wise? Absolutely -- particularly if you find a way of maximizing your liquor sales.
For example, most restaurants with a liquor license need to make at least 30 percent of their sales from liquor to make the license worth it. So, if your sales in pizza top $60,000 in a single year, that means you should aim to make at least $20,000 in liquor sales. If you sell your drinks for about $5, that means you need to sell at least 4,000 drinks every year or 333 drinks a month or 11 per day.
So if you sell the average of 600 pizzas every week or 85 per day, you need to sell alcoholic drinks for at least 12 percent of your meals. This rate of sales is very low and should be more than easy enough for most pizza places to meet, which means your liquor license is likely to be very profitable for you.
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