In this video, we’re going to cover how to get a liquor license.
I’m Eric Goldschein, editor at Fundera.
Liquor licensing laws differ in each state, but this video is going to be helpful no matter
where you’re located.
I’ll cover the basics of liquor licensing laws and some of the essential differences
among the states, so you can get your restaurant or beverage business licensed as soon as possible.
Let’s get started.
Step 1: Gather the documents you’ll need.
No matter which state your business is located in, there are several documents that you’ll
need to apply for a liquor license.
Gather the following:
Photo identification for all business owners.
Your business’s contact information.
Proof of business ownership such as a certificate of incorporation.
Employer identification number if you have one.
A lease agreement or copy of certificate of title for the premises.
Copy of other business permits, such as zoning permits.
Photos of the restaurant or business.
Menu of food and drinks that you’ll be serving
If you have these items organized and ready to go, you can speed up getting your liquor
license.
Step 2: Figure out which type of liquor license you need.
There are a few different kinds of liquor licenses.
Although the exact names vary by state, every state distinguishes between on-premises vs.
off-premises liquor licenses in some way.
On-premises license: For establishments which serve liquor to be consumed on-site, such
as restaurants and bars.
The license will specify the exact areas in which customers can drink.
Off-premises license: For establishments which sell liquor to be consumed away from the premises,
such as a convenience store or grocery store
In addition to this distinction, there are three main classes of liquor licenses among
which you might need to select in your state:
Tavern license: This type of liquor license is reserved for bars, pubs, and other establishments
whose primary source of business is liquor sales.
Beer and wine license: This type of license is for establishments that serve beer and
wine but no hard liquor.
Restaurant license: This type of license is for restaurants that serve alcohol as a secondary
source of business.
For a restaurant license, there will likely be a limit on the percent of your earnings
that can come from alcohol sales (before you’re required to upgrade to a tavern license or
beer or wine license).
There are also temporary permits available for purchase in most states if you’ll be
hosting a one-off event with liquor sales.
Many liquor licensing authorities will require you to submit a business plan to make sure
you’re accurately describing your business.
Watch our video on business plan writing for more tips here.
Step 3: Obtain and fill out the liquor licensing application.
Contact your state’s Alcoholic Beverage Control (ABC) board or equivalent liquor licensing
agency to request an application.
Depending on where your business is located, you might also have to fill out an application
with your city, county, or town.
Be prepared to include the liquor license fees along with your application.
The average cost is around $1,400 across states.
Most states will also charge a nonrefundable application processing fee, usually ranging
from $50 to $100.
A tavern license will cost more than a beer and wine or restaurant license.
Different states have different processing times for liquor licenses, but you can expect
the process to take up to 30 days, so plan ahead.
As part of the approval process, you might have to get a background check or provide
fingerprints.
There will also be a public notice period.
As your application is pending, a notice will be posted at your place of business specifying
what type of liquor license you’re applying for and what you’ll be selling.
If anyone objects, you might have to defend your right to a liquor license at a public
hearing.
Step 4: Understand license quotas.
In most cases, as long as you meet the requirements for a liquor license, such as being over age
21 and passing a background check, you’re entitled to one.
However, some localities have license quotas, where only a certain number of businesses
at a given time are allowed to have a liquor license.
If that’s the case in your locality, then your only option to sell alcohol might be
to buy a liquor license from an existing business, which will increase the cost of the license.
You can buy liquor licenses from restaurants or bars going out of business or that are
for sale.
For help, contact a business broker or check out business-for-sale sites like BizBuySell.
We also have a video on buying a business to help you out.
If you end up buying a liquor license from an existing business, make sure you know the
type of license you’re purchasing as you will be constrained by the same restrictions
which applied to the original owner of the license.
Step 5: Maintain your liquor license in good standing.
Most liquor licenses remain active for 1-3 years, after which you must renew the license.
As long as you’ve maintained your license in good standing, renewal should be relatively
easy.
To keep your liquor license in good standing, remember the following:
Never sell or serve alcohol to anyone under the age of 21.
Never sell or serve alcohol to someone who is already visibly intoxicated.
Post the liquor license in a place that’s publicly visible.
Confirm everyone’s age with photo ID, no matter how old they might appear.
Never violate the terms of your liquor licensing agreement, such as where on the premises you
can serve alcohol.
Fortunately, the fee for renewing your liquor license is often less than purchasing a new
license, so the biggest share of costs will come up front.
And that wraps up our video on how to get a liquor license.
If you have more questions or comments, drop us a line below.
You can also visit youtube.com/fundera loans, or subscribe to our channel for more videos.
Thanks for watching!