Mindy Jensen: Today we are putting 2 liquor store owners side by side, but their businesses couldn’t look more different. One is thriving while the other has faced some struggles, and we want to understand exactly what drove those 2 different outcomes. We’ll dig into the decisions, mistakes, market conditions, and day-to-day realities that shaped each business. Hello, hello, hello, and welcome to the BiggerPockets Money Podcast. My name is Mindy Jensen, and while Scott is on vacation, I am flying solo today. I am so excited to bring on Ashley Kehr, the host of the Real Estate Rookie Podcast, and Tim Delaney, who last joined us on episode 325, where he talked about buying a liquor store. Ooh, foreshadowing. We are really excited to hear about their respective small business experience. So Ashley and Tim, welcome to the BiggerPockets Money Podcast, or welcome back to the BiggerPockets Money Podcast.
Tim Delaney: Thanks for having me, Mindy.
Ashley Kehr: Yeah, thank you, Mindy.
Mindy Jensen: So Ashley, this whole episode was inspired by 2 things. First, your Instagram post from about 6 weeks ago where you were talking about your experiences opening up a liquor store from scratch, and episode 325 of the BiggerPockets Money Podcast, where Tim Delaney came in and shared how he bought a liquor store that was already running but not real profitable and turned it into a profitable liquor store kind of overnight. I mean, he had a lot of things going for him that made that happen, but I want to know—first of all, when did you start your liquor store, Ashley, and why did you want to start a liquor store?
Ashley Kehr: Well, first of all, Mindy, thank you for making this happen. You know, Tim usually charges 50 grand for an hour consultation, but I started my liquor store in 2020. We officially opened our doors in November of 2020, so basically kind of the tail end of COVID, where less stuff was shut down. But really the inspiration for doing that was I was working for another investor who owned a bunch of different businesses, and one of them was a wine and liquor store. And I just saw what a cash cow it was. Whenever he needed money for something else, he’s like, “Oh, let’s get it from the liquor store to fund this or pay for that.” That was where the idea of owning a cash cow business kind of came from. And then next came the property, where in 2017, I met an investor who was ready to offload. He was older, wanted to get rid of all of his properties, and I bought the majority of his portfolio. But there was one commercial building with 2 residential, 2 commercial units that he wanted $90,000 for. And I just didn’t know what I would do with that. There wasn’t a ton of stuff going on in the town. I wasn’t sure I could fill the commercial units. So fast forward 2 years later, he approaches me: “I need to get rid of this building.” Lo and behold, I’m able to get the building for $20,000, and I’m like, okay, I have some wiggle room here. I don’t owe anything on this property. I have to go in and renovate it, but I have lots of room where I can experiment with a wine and liquor store. And in New York State, there are rules around who can actually hold a liquor license and how close in proximity it is to another liquor store, all of this. Luckily, there was no other liquor store in this town, or really even close to it, at this point. So we renovate the building and we decide to start the liquor store from scratch. So kind of simultaneously, I’m getting my liquor license. I hired a liquor license broker to handle that process. And then we got to work on doing the rehab of the building.
Mindy Jensen: So you said there was no liquor store in this town. Was there a reason there was no liquor store in this town? I’m thinking of a lot of movies, and the one that I’m thinking of is Footloose, where the town was dry and they didn’t even like dancing. Was this town like a very religious town or a dry town, or was it just an open opportunity?
Ashley Kehr: Very rural town. There’s not even a gas station. There’s a little convenience store, but the gas pumps are removed. There is a Tractor Supply, a Family Dollar, but really there’s not a lot happening. But it’s on a main road that connects other small towns to a main town, I would say. And so there used to be a liquor store—probably been closed for 10, 15 years now. But actually the building across the street that is now demolished actually was the old liquor store that they had at one point in time.
Mindy Jensen: So you opened up in November of 2020. I remember drinking a lot during COVID. I specifically remember a tweet that I made. I’m like, why does every day end in bourbon? Because it was, you know, I’m trying to teach my kids and work. My kids don’t want to learn. My little one did not want to learn at all. And it was just like, I’m not driving anywhere. Hey, let’s go try some more alcohol. Not like alcoholic level, but I definitely remember drinking a lot more during COVID. I’m sure you are both aware, but Andrew Huberman came out in August of 2022 with an episode called “What Alcohol Does to Your Body, Brain, and Health.” And around that time, I noticed that pretty much all of my friends stopped drinking. I kind of stopped drinking because my kids were back in school, which makes me sound like such a terrible mom. But really, try to teach. So did you notice a dip in sales in 2022?
Ashley Kehr: Honestly, I do not know because, well, at that point in time in 2022, I was so hands-off and so removed from the business. So when we started it, my business partner—he owned 5 Subway franchises and he had a manager that oversaw all of it. So our big idea was to have her run the store. So she did our first order of inventory. She got us set up with our POS system. And then she’s like, you know, I really don’t have time to do this and you need to get someone that has experience with liquor.
Mindy Jensen: Mm-hmm.
Ashley Kehr: Well, there’s not a ton of people that are liquor store managers. So we ended up finding a bar manager. She had managed bars before, done inventory, knew what people liked, what sold, things like that. So we brought her in, and between the supervisor we had from the Subways and her, they kind of got it running. My partner and I were just completely hands-off. They did everything. And eventually the supervisor wasn’t involved anymore, and it was just our manager taking care of everything. And the first couple years were great. And then we started to notice a slow decline until last year—2025—where we had to put $40,000 into the company just to keep it running to finish out the year.
Speaker 1: Wow.
Mindy Jensen: Okay, so Tim, your experience with owning and running a liquor store is a little different. How would you characterize your involvement with your liquor store on a day-to-day or month-to-month basis?
Tim Delaney: I think Ashley and I almost took opposite paths. So my first days, months, years, I was super actively involved in the liquor store, even though it had been running for a long time. That was my day job for the first 5 years. You know, you talked about overnight success—I mean, overnight in the sense of 5 to 7 years.
Mindy Jensen: Sure, absolutely. Just a couple overnights.
Tim Delaney: But, you know, that’s still a short time in the grand scheme of things, as we all know. So I was super, super involved from early on until about year 6-ish, 7, and I started transitioning to an assistant manager and then to a general manager, to the point now where I go in like one day a week, but I’m checking in by text message on a regular basis, and I still handle all the bookkeeping and payroll. So any money that’s going out is still under my control.
Mindy Jensen: Did you ever have to put money into the business once you did your initial purchase? Like your own money, not like, “Oh, I’ve got to restock inventory,” of course you do.
Tim Delaney: No, it was self-sustaining from my initial cash investment at the closing on the purchase.
Mindy Jensen: So let’s see what sizes of stores we’re talking about. So Ashley, approximately how big in square footage is your store?
Ashley Kehr: It’s about a little over 1,000 square feet if you’re including the retail space and then the storage. And then there is like a small garage unit that’s attached to it that we eventually will use for inventory. We just have to get some electric in there, but probably 1,100 square feet, I would say.
Mindy Jensen: Okay, what sort of population are we looking at, either in the exact city that it’s in or the surrounding area, since it’s on the way to the big city?
Ashley Kehr: So in that town, just in that little town where it is, it’s a population of, get this, 3,500 people.
Mindy Jensen: Wow.
Ashley Kehr: That’s how small it is, to give as a comparison.
Mindy Jensen: Okay. And then like the greater area, or like the big city?
Ashley Kehr: So it’s all small rural areas. I would say the biggest town that’s closest to it is still a 15-minute drive. So that one’s 60,000.
Mindy Jensen: Okay, so there are people in the area?
Ashley Kehr: Yeah, yeah. So it’s just a lot of little small towns that are near the liquor store, but they’re on that main road that connects a lot of the small towns. We also have a jail that is close by, so we get a lot of corrections officers on their way home from work going, you know, out of the jail back home.
Mindy Jensen: And Tim, how big square footage-wise is your store, and what sort of population are you serving?
Tim Delaney: Yeah, so my store is about roughly double the size, about 2,200 square feet, including storage and retail. The population of the town that the store is in is just under 12,000 people, but I am a little bit closer to larger towns. So the suburb just to the north of me is about 45,000 people. The suburb just to the west of me is 45,000 people. And the suburb to the south is like another 12,000 to 15,000. I can draw from some of those other suburbs a little bit.
Mindy Jensen: So because there’s so many more people around you, you probably are not the only game in town.
Tim Delaney: I am the only store in my town. However, there is a store to the east. There are a couple stores directly to the north. There’s a couple stores directly to the west and a couple stores directly to the south. So all the other towns around me have multiple stores.
Mindy Jensen: Okay, but you’re the only one in your 12,000-people town. That’s awesome.
Tim Delaney: Yes, it’s fantastic. I don’t know that the town could support another store though, necessarily. Having only 3,000 people is a tough uphill battle for Ashley, I think. I think being on a main road helps—that’s definitely a huge advantage ’cause you get more people passing through. Wine and liquor is really a convenience item. People don’t go very far out of their way to get it for the most part, unless you have a very, very good reason for them to.
Mindy Jensen: Yeah, in my town there’s probably 90,000 people, and I can think of like 7 liquor stores off the top of my head, not including Costco. There’s one right up the street. And when I just want a beer, I’ll run up there. But when I want a specialty whiskey, or I want to see different types of whiskey, or I’m buying gifts, I’ll drive all the way over to the other side of town, which is like 10 minutes, because there’s a giant, giant liquor store, liquor warehouse, in my town. Shout out to Wyatt’s—let’s name names, shout out to Wyatt’s Liquors—because they really do have a ton of different options available, in every single kind of alcohol. So Ashley, what did you think was going to be necessary to make the business successful? Because I own zero businesses, like retail businesses. So if I was doing this, I can completely see your point of view: “Oh, this is awesome, I own it, but I hired somebody, so now I don’t have to run it.” And I absolutely would’ve done it your way. Tim’s way—I mean, Tim, that’s a job.
Ashley Kehr: I don’t want to have to go to work every day.
Mindy Jensen: Yeah, right.
Ashley Kehr: And that was the problem. The problem was I was a real estate investor first. I may not have stocked the shelves ever at that liquor store, but I installed the tile in the bathroom there, you know, like I put up all of the ceiling tiles in there. So I think a big problem was that I thought it was going to be more passive than I thought. And I’m not pointing the blame or making an excuse, but that’s how it was for the investor that I worked for. But that’s because this was an established business that had run for years and years and years, and he had a great manager in place that took care of everything. And they also had a way better location, way busier. And so I thought I was comparing apples to apples, but I really wasn’t, and I couldn’t do it the same way. So for 5 years it went on to just run like this, and it was not until this past December—back up even a year before that, in December of 2024, our cash was just dwindling, dwindling, dwindling. And so a check overdrew to pay one of our suppliers, and they gave me a call and said, “You’re going to be cash on delivery because your check bounced.” And so I’m like, what is going on? We had not received a credit card deposit in over 3 weeks. So every time someone’s card was swiped, we were not getting paid for that. So after doing some investigating, it was because there was an error with our machine. So they had all the records of all the credit card swipes, but the credit card company, the processor, had to go in and manually enter all of them that had happened over the course of those 3 weeks. And then they had to go in and hold the money—it was actually around $20,000. They had to hold the money for a certain amount of time because they were afraid of chargebacks, because it had been so long before they were actually charging people for what they had purchased 3 weeks prior. So we ended up not getting the money for like 60 days. That was kind of the first eye-opening thing that really should have—my partner and I blamed it on ourselves because we did not give access to the bank account to our manager. She could see the bookkeeping, things like that, but not the actual account. So we went in, we made her a user so she can see and check every day that deposits are going in for credit cards. She was making the cash deposits at that time. So fast forward a year later, in December, we’re finding out that our cash balance is low again. And, you know, not as bad as overdrawing, but she’s waiting 3 weeks before making cash deposits. So all that money is sitting in the safe, not being deposited. So that’s when I start to get interested. I have some time freed up, I’m thinking, let me look at some things. I check credit card statements, and there were charges for Wegmans, which is a grocery store near us, a bunch of Amazon charges that I didn’t see the receipts for, Bath and Body Works purchases. So that was just going back a year at that point in time, and it ended up being over $800. And when I asked her about it, you know, it was, “Oh, this is accidental. My card is linked to the Amazon account, I must have ordered that and charged it to that instead of my card.” And she paid us back the money. Then more things start coming up as to—you know, I’m starting to talk to the employee that’s there Monday through Friday, 9 to 5, and she’s telling me that she’s the one actually doing the inventory, she’s the one that’s actually getting the deposits ready, she’s the one that’s actually doing the orders and doing this and doing that, and the manager is rarely ever there. But at this point in time, she’s charging us 20 hours per week basically, and there is a bunch of stuff she can do at home, like the payroll, things like that—she could do the inventory. But this other girl’s telling us that she’s the one that’s actually doing it. End of December, we decide it’s time to let her go, and I’m going to step in and see what I can do with the place. So that was the end of December—I think it was maybe even January by the time we actually let her go. But it took us that long to really execute, and the reason was the time commitment—I just was not ready to make that time commitment of what would need to happen. So when we first started finding the issues in December, I was slowly gathering information so that I could take over that day we fired her. Like, I didn’t know how to order any of the inventory. I didn’t know who our reps were. There was so much I didn’t know. But then when I found out that the girl that was working most of the time, she knew a lot of that stuff, it was so much easier to let the other person go because she wasn’t really the keeper of all the information anyways.
Mindy Jensen: Yeah, when you’re listing these out, I’m like, Wegmans—okay, she’s buying lemons and limes.
Ashley Kehr: We can’t in New York State.
Tim Delaney: So, unless they have a little bit of alcohol—
Mindy Jensen: Oh, that’s when you get your syringe and inject them.
Tim Delaney: Okay, so you can’t—it’s only alcohol.
Mindy Jensen: And I’m thinking Amazon is like random bar tools, like shaker cups or, you know, shot glasses.
Ashley Kehr: There was, but there was no receipts. And when I asked her for the receipts for them, that’s when she said, “Oh, I was redoing my son’s bedroom, ordered some things.”
Tim Delaney: Yeah.
Mindy Jensen: And like that, I get—like, I have a business partner, and every once in a while we’ll be going through the receipts and he’ll be like, “Oh yeah, that was personal, sorry, the business card looks exactly like my personal card and I just swiped.” Like, it’s really just a mistake. But when it becomes a pattern—like, this is my partner, he’s not stealing money from… he’s stealing money from himself too, so it’s not really an issue here. How frequently were you checking in on the business, either just looking at the books or actually physically walking in, until you got this second low-funds notification?
Ashley Kehr: Checking in was if someone in my family or friends needed liquor and they asked me if they would—I would get it for them, or if someone wanted me to donate to a fundraiser, that was checking in. Or, you know, that was it. I would go in, I would get whatever I needed for them, and that was it. That was as far as checking in. Only if the manager reached out—we had a group text, me and my partner and the manager—if she reached out because she needed us to do something or there was a problem, that was the only time we were actually checking in. It wasn’t anything else. I did have the bank account linked to my dashboard. I have a small community bank that I use for some businesses, and so I can link them all in one dashboard. So I did do that so that I could monitor it. But my other businesses don’t really require me to check in on it on a daily basis. The liquor store was starting to be where I had to continuously monitor it. So there really was no checking in.
Mindy Jensen: Tim, let’s go back to your time after your 5 or 7 years where you were there all the time. You brought on an assistant manager and then you brought on a manager. What did that process look like to kind of transition over to giving up some control to someone else?
Tim Delaney: It was slow, kind of a long process, but intentionally. So, going back to when I bought the store, I bought it to be a job. I wanted to replace my income. I planned to be there for a while. I did not plan to be there day in, day out for the rest of my life, which is why I started things in motion. Every decision I made was designed to, okay, what does this look like when I’m not here? What’s my checks and balances? How can I set it up in a way that I can continue to run this in the future without having to be here every day? But those first few years, I knew I was going to be there. So when I hired the assistant manager, I started training him slowly. I started handing off responsibilities like ordering the inventory. And as I handed off each task to him, I had him create a standard operating procedure, an SOP, in a Google Doc that was shareable with both of us so that he had it for himself. But then also, even more importantly, because he’s remembering how to do it, he would have it in the future to hand off to somebody else that was replacing him. So we built up a whole system, series of documents like that. And, fast forward a year, couple years into him being assistant manager, I promoted him to general manager. He now has somebody that he is working with to take over the inventory ordering from him. So he’s pulling back out those old SOPs and asking that person to update them as he goes over the new processes and procedures, because things always change a little bit. It was a slow process. It was not an overnight, hey, I’m going to be gone tomorrow, good luck, hope you can maintain everything we’ve done here.
Mindy Jensen: Ashley, do you have a standard operating procedure document or set of documents for your liquor store?
Ashley Kehr: Yeah, there is a binder that the manager had created when she first started the store that goes through a lot of that stuff. So like hiring a new cashier—not necessarily stuff she’s doing, so definitely need to do that—what she was doing, her processes, but for hiring the cashiers and things like that, she did have all of that documented. But Tim, I really need to do that for the management position as well. Right now it’s me and the full-time employee that works there kind of sharing duties. And I know I’m still a bottleneck for her, but Tony Robinson, my co-host on Real Estate Rookie, one thing he always does—and I’ve forgotten about this because it’s been years since he’s mentioned it—but whenever he hires someone and they’ve replaced somebody else that already had the SOP, he will ask the person to create the SOP as to how they would do it and then send it to him. And then he kind of compares it to see if maybe there’s a more efficient method, or no, I want you to go back to using this way, or kind of blend the things. But I had forgotten about that idea, but I think that’s probably something I should do too, is have our full-time employee go back and look through all that stuff and say, how would you update this now or do differently?
Tim Delaney: I love having the employee that’s in that role working on that document because they’re the one that touches it the most. Recently, I had to open up on a Saturday morning for the first time in a while, and I asked my manager to leave the opening SOP out on the counter for me the night before so that when I went in, I could go through it step by step as I was doing it in real time to see if it still applied, if things needed to change, because we hadn’t hired anybody new in such a long time. But we were about to hire somebody new, so I wanted to make sure it was somewhat up to date, and then they can continue to update it as they transition into the new role as well.
Mindy Jensen: So one quick tip about this Google Doc that you said was shared with everybody: make a duplicate of every single one of those documents and put it into a folder that only you have access to, or you and your partner, so you don’t get a disgruntled employee. Not saying your current employees are disgruntled, but you don’t get a disgruntled employee who just comes in and wipes everything out.
Tim Delaney: Great tip. I’m actually in the process of backing some stuff up for another entity right now.
Ashley Kehr: Actually, here’s another pain point that I had, as another example of something not to do: when we just let our manager run with the liquor store, she set up a lot of things including Google Maps, or when you Google something and it comes up on the side—I can’t think of what it’s called, but your Google account for your business—she had ownership with her personal email to that. And then, on Yelp, it was her personal email that was linked to that. So there was a lot of those things that took so long to change. Even the Facebook—she had created our Facebook page. She created it, so she was an owner, and I was an admin of it. So I had access, I had full access, but I couldn’t remove her because she created it, unless she allowed herself to be removed, which took a long time for her to finally push the button to do it. But those are just things that were honestly our fault because we never should have had that happen in the first place.
Mindy Jensen: Gmail accounts are free, so your company’s main Gmail account should be whatever the name of your company is at gmail.com, or close enough. I mean, you don’t have to give that out to anybody, but then that is the account making the Facebook page. So that account still owns the Facebook page and the Yelp and all of these things that—yeah, you don’t think about this. I’m thinking of past jobs where, yeah, I started the thing and I had to give ownership to somebody else because it’s no longer mine. I don’t work there anymore, so I have to give it to somebody else. And I wasn’t a disgruntled employee, so I was happily giving it away. But yeah, if you have a problem with an employee, you don’t want them to be the one that has all this information. Ashley, you said she was holding cash in the safe for up to 3 weeks at a time before depositing it?
Ashley Kehr: Yeah, so it would be very random when deposits were made, and we found out from the full-time employee that it was because she was never there. She never came into the store. So just when it was convenient for her, she would come and she would get it, and then she would go and deposit it.
Mindy Jensen: Tim, how frequently should somebody be depositing the cash from the day’s sales?
Tim Delaney: It depends on the amount of cash you’re dealing with, but, for my store, it’s 2 to 3 times a week.
Mindy Jensen: So it’s not an everyday thing, but it’s not an every—once every 3 weeks—thing.
Tim Delaney: A lot of businesses do it every day. It just depends.
Mindy Jensen: Ashley, one of the things in your Instagram post that really intrigued me is that you said you are testing out stocking rare bourbons, that it’s a grind to get them, but we have so many people interested. I have a friend in the Louisville, Kentucky area on the Bourbon Trail, and we went to a couple of different distilleries when we were down there the last time. There’s a lot of really big interest in these rare whiskeys and bourbons. How long have you been doing that?
Ashley Kehr: Just for probably 2 months. I would say it started at the end of June. I think we got our first order of bourbon. Until that point, I had no idea the process that you actually go through with our distributor to do that. So I connected with him and he got me all set up. So, the process is, basically, it’s a limited availability release. They release it at a certain day at a certain time. I felt like a teenager trying to buy concert tickets again when they’re released on Monday at 9:00 AM. You gotta hit the button to buy them. It basically tells you what’s going to be available, and you just have to be ready to submit your order right when they go available before they’re actually sold out.
Mindy Jensen: And how has that been? How has your experience been with these rare bourbons? Are people in your area buying them, or is this like—are you shipping these? Can you ship alcohol?
Ashley Kehr: We don’t ship anything. We’ve had DoorDash approach us to do DoorDash, but I just feel like I can’t handle anything else right now. Let me at least get brick and mortar complete before I handle anything else. But we’ve actually had some bourbon collectors come out of the woodwork in our area that—you know, when we got that first shipment come in—and now we’re getting people that are making special requests, but it’s like you only know a week in advance, really not even a week in advance, of what’s going to be available the following week to order. We’ve been putting it on our social. We’ve probably done maybe 5 different kinds since that first order in June. Yeah, it’s definitely bringing, you know, some bourbon collectors our way. I would say that I didn’t know that we had before as our customer base.
Mindy Jensen: Tim, what kind of promotions have you done along the same vein or completely different that have been really successful for your store?
Tim Delaney: Our bourbon program has probably been the biggest stability factor the last couple years, as alcohol sales have declined nationally. I generally shy away from promotions in the sense of “this is on sale, this deal on this product,” partially because I saw some stores early on in my time go out of business trying to run competitive sales with the big giant warehouse-type stores. They’ll occasionally do things where you buy a case of something and you get it basically at cost. And, in theory, it’s a loss leader where somebody comes in, buys a case of that, and then buys a couple bottles of something else at a higher margin. I didn’t see people doing that early on when I tried a couple sales. They would get the sale item and that was it. So I never really got into the promotion sales game, but what we did do is really—and this is going back about 10 years now—really refine our bourbon program. So, to Ashley’s point, I started having people come in, ask about certain bourbons. I educated myself on them, learned more about them, started buying whatever I could get my hands on. And then we have a whole system of how we distribute those to our customers in a fair way, where they’re only going to people that shop at our store somewhat regularly. We can’t tie our sales specifically to somebody spending money at our store—that’s against the law. But we also don’t sell it to the random person that just drove 100 miles and is hitting every single store in the area trying to get their hands on these bourbons, and then we’ll never see them again, or they’re trying to resell them because there’s a huge resale market on them. And we sell them at fair prices so that our regular customers will be happy with the opportunity to get them. The other aspect of that, and one of the ways we’ve cultivated that clientele, is we do a lot of single barrel bourbons. So not to get too deep into it, but as bourbon ages, every single barrel of bourbon in the rickhouse—which has hundreds of thousands of different barrels for some of the big suppliers—tastes a little bit different. So if you taste a barrel of Jim Beam and you taste 5 different barrels, you will get a slightly different taste out of each one. And some of those barrels are exceptionally good tasting, and we will buy that entire barrel, and they will bottle it just for our store, and then we will sell it to our customers. And so if they like that particular bottle, there is only 100 to 300 of those bottles that will ever be made. And if they want them, they got to get them from us. And so we do a lot of those.
Mindy Jensen: Do you go down to Jim Beam and taste it, or do they send it up to you? How do you get into that?
Tim Delaney: They do both. When we first did it, we relied on them sending us samples. When they’re bottling something like Jim Beam, they’re taking thousands of barrels and dumping them into the big vat and then bottling it, because then they get a consistent flavor profile in the bottle every time. The master distiller—somebody in the distillery—is tasting all of those barrels before they dump them, and so when they find a really good one, they put it aside. So then they’ll send kits—they’ll pick 3—and they’ll send them up to us and we can taste them. And if we like one a lot, we’ll order that whole barrel. But we find it more enjoyable—we’ll go down to Kentucky at least once a year, and then to Nashville, to Jim Beam once in a while, and we’ll bring some customers and make a thing out of it. So our customers are involved in the process as well, which they love, because then they share that experience with more of their friends and they buy more bottles. And it’s a fun experience, as you might imagine, going to a distillery and tasting samples of bourbon.
Mindy Jensen: Yeah, put me on your list for the next time you go down there. That sounds like a lot of fun.
Ashley Kehr: I was gonna say that too, except I don’t really like bourbon, but I’ll go just to learn.
Mindy Jensen: So that’s really interesting. Ashley, have you heard of that?
Ashley Kehr: Only from Tim talking about it before, but other than that, no.
Mindy Jensen: Okay. Would that be something that you’d be interested in?
Ashley Kehr: Yeah, that’s why Tim’s gonna take me next time so I can buy a barrel to take down there. I don’t know if we mentioned this, but me and Tim are both from Buffalo. I don’t know if I had said that at all during the thing, is that we’re in the same area.
Mindy Jensen: Oh wow, okay. But are you competitors?
Ashley Kehr: No, not really.
Mindy Jensen: Okay. Is there any other alcohol that has the following that the bourbons do? Like, I know some people really get into Scotch. Whiskeys have a bit of a different group of people that follow them, but whiskey and bourbon, they’re pretty much the same, especially to somebody like me who appreciates it but doesn’t really, really, really get into it.
Tim Delaney: Tequila is probably the next closest thing to bourbon. There hasn’t been as much of a big following or big surge in Scotch as there has been in bourbon. There are Scotch aficionados and lovers, but not to the level that bourbon has gotten in the last decade.
Mindy Jensen: Okay. Ashley, do you have any plans to expand from your rare bourbons into rare tequilas?
Ashley Kehr: There actually is a rare tequila being released this week. So I did do some Claude input asking about tequila collectors and all of this stuff, but it’s a very specific group of people. It’s not as large of a group of people as bourbon collectors. So I’m not gonna order it unless, you know, maybe in the future I would, if we already know we have somebody that’s interested in tequila. It was a pretty expensive bottle too. I don’t remember how much, but not something I want sitting on the shelf. And I don’t really drink liquor, so not something I would enjoy myself.
Mindy Jensen: You don’t drink liquor and you own a liquor store. That’s fascinating.
Ashley Kehr: I mean, Tim’s given me a glass of—what was it—Pappy Van Winkle one time, and I did it. I did enjoy that. But other than that, I really don’t drink liquor that much.
Speaker 1: Okay.
Mindy Jensen: So Tim, knowing Ashley’s story and hearing the issues that she has had, what advice would you give to her for her to turn her liquor store around and make it a really successful venture for her?
Tim Delaney: I think she’s on the right path. Right now, the attention to it again—stepping in, really learning it from the inside and getting to know it and its and your customers. I think one of the big advantages that I had buying an existing store versus starting from scratch is I already had a history, even though it wasn’t computerized or there weren’t any records of it. I had the knowledge of what customers were already drinking. So when you’re starting, especially a store like a liquor store from scratch, you have to make decisions on what kind of vodka you’re going to buy—big deals on so that you can be at an affordable price. And since you have no data to go on, you don’t know whether to choose Absolut or Svedka or Grey Goose or whichever one, because you can’t afford to buy all of them at such a deep level. When I came in, I had all that—I knew which ones were already selling, I knew which ones the previous owners were buying big deals on so I could continue that. So I think with actually getting to know the customers and hearing from them what kind of bourbon, what kind of vodka, what kind of tequila they like, she’ll be able to figure out which ones she can improve her margins on by buying a little bit deeper on the ones that make sense that will continue to move more quickly.
Ashley Kehr: That’s an excellent thing that I should be doing because I’m really not doing that. I’m not involved with the customer interface like at all. I’m relying on the full-time employee to tell me what people are wanting, and then, you know, we make the order together. But what I should be doing is I should be tracking every time she tells me that. And one thing I’m building out right now is a monday.com board because all of our communication is through text. So she’ll text me, “Here’s a new UPC code, I need you to enter it into the POS system. Here’s the price I think it should be. Here’s what we paid for it.” If I’m at my kid’s soccer game, I’m not looking at it. I leave it unread so that I remember to look at it later, and then I forget, and then it’s the next day. So that’s like one thing I’m working on building out now, so she can go and put it into the monday.com board. She can look, see what the status is at, if I’ve received it, if I’ve updated, if there’s any problem or whatever, instead of the constant back-and-forth text messaging. And I think that’s like one of the boards I could create, as to here’s like customer wish list, here’s like customer feedback, you know, things like that that we could collect it all, instead of just her telling me when she just happens to text me about something else, saying this person wants that or whatever.
Tim Delaney: So the way I did it very early on, I had just slips of paper at the register, and every time somebody asked about something, I would write down the name of the product. If they were willing, I would take their phone number and their name, and then I would call them back within a day with what the price would be if I ordered one bottle for them, because sometimes that price is pretty astronomically high. I would let them know what I thought a big store in the area might sell that product for if they found it on the shelf, and then I would kind of feel them out to see if it was something they would buy regularly or if they just wanted a one-off bottle, and then what that price would be if I was going to stock it on the shelf. And that helped me kind of start picking and choosing what products to bring in in the future. Now we’ve set it up in a system where it’s a Google Form, so we have an extra iPad, and the customer usually doesn’t do this part. It’s usually the employee at the counter still writing it down by hand, but then later on they’ll go into the Google Form, and then it creates a spreadsheet for my manager to see, so he can call people back or just order products and bring them in if we feel like it’s a good buy. That helps a lot. So a monday.com board might do the same thing.
Ashley Kehr: You have social media, right, for your liquor store?
Mindy Jensen: Yeah.
Ashley Kehr: Have you ever put that form on social media, as to like, “Hey, you know, we’d love to hear what you are looking for as a customer,” and then have them fill it out there, just to see?
Tim Delaney: No, I haven’t, but I will now.
Ashley Kehr: That was just the first thing I thought of, is putting it out there. I mean, not to call every single person if you get a lot of feedback, but just for general knowledge of, you know, what people are looking for that follow you would pull some weight.
Mindy Jensen: Yeah. And maybe enough people would want Svedka vodka that you’re not selling or whatever. Like, oh, there’s actually a bit of a market for this.
Speaker 1: Okay.
Mindy Jensen: And then the next social media post is, “Hey, now we stock this vodka that everybody was looking for.”
Tim Delaney: The most interesting data point out of that would probably be the amount of things that people ask for that we already have in the store that they didn’t realize we had, for one reason or another.
Ashley Kehr: There you go. You can post what you already have.
Mindy Jensen: Especially if they give you an email address or a phone number. “Hey, good news, we have this in stock right now.”
Tim Delaney: Yep, that’s how fast we are.
Mindy Jensen: Ashley, what are your annual sales expected to be this year, now that you’ve taken— you took over in January, right?
Ashley Kehr: Yeah.
Mindy Jensen: What are you expecting sales to be this year?
Ashley Kehr: So last year we did $220,000, and I’m trying to get us closer to $300,000 this year. I’m more focused, I guess, on the bottom line than actual sales, I would say, right now at this point. But we’ve already seen an increase in sales, especially— I’d probably say not until maybe like May or so, definitely a big increase in sales. But it’s more the bottom line that I’m really focused on, is to not lose money this year. And so far we’re on a good track. I mean, just cutting our manager, like that was a, you know, a big expense every month that we let go. I’m not paying myself for anything I’m doing for the store, but then there’s just been a little— little things here and there that they would spend money on that we don’t need. But yeah, so we did $220,000 in sales last year, and our loss was around that $40,000 that we had to put into the company.
Mindy Jensen: Do you have any plans to promote your current employee?
Ashley Kehr: Because it sounds like she’s doing a lot of either manager or assistant manager. Yeah, so the day we fired the other girl, we gave her a raise and told her that we would want her to help me with stuff. So she and I do the inventory ordering every week together. We started it where I would physically go there every week. We would sit down. She’d make me actually click all the buttons and stuff and physically do it. And she would tell me, like, “This is what I think we should get. Here’s where we’re low,” and everything. And so every week she writes down a list of what she wants to order, like her wish list of what we should get, what’s low, things like that. And then she and I go over it together, and we get to a total amount that we’re both comfortable with. And then she goes ahead and inputs everything and orders it. I’m still doing the payroll. I’m doing all of the bookkeeping, keeping track of the banking. But she manages— we only have one other employee right now, so the other employee, she manages her, does everything for that. So we did give her a raise and ask her to, you know, basically do what she was already doing.
Mindy Jensen: And unfortunately, just with more money now.
Tim Delaney: Wow.
Mindy Jensen: How did you convince her to say yes?
Ashley Kehr: Yeah.
Mindy Jensen: One thing you said, she will ask you to input in the POS system. Why can she not do that herself?
Ashley Kehr: You know what, that was something I was thinking of today, because she got a text saying I didn’t put in UPC codes that I was supposed to yesterday, and reminding me that I needed to do it. The other manager never set her up in our POS system, besides just her cashier login. So that’s something— once again, me the bottleneck—as in, I have to go in and add her as a user and set her up to use the dashboard that we have on our actual computer, and not just the cash register or whatever, and then figure out which access to give her for what different things, as a user, so she can input the UPC codes. Because yes, that is 100% something I shouldn’t be doing anymore. At first, when I took over, I wanted to literally do every little tiny thing, to experience and to learn, but I am just becoming more of a bottleneck for some of those tedious little things, where I think, “I can just do that later, I’ll do that later,” and it’s not something I can currently do from my phone right now. I have to actually do it on my computer, so a little more time-consuming for me.
Mindy Jensen: Yeah. Tim, what are your annual sales expected to be this year?
Tim Delaney: We will probably be at about $2.5 million.
Mindy Jensen: Okay. On just doubling the size of the store and focus— I mean, you’ve got those special bourbons that are coming in. How many of these special bourbons do you sell? Like, how many barrels do you buy a year?
Tim Delaney: We did about 15 barrels last year. Some of them are tequila, so we’ve done a couple tequila barrels as well, mostly bourbon, a couple ryes. We are probably on track for about 15 this year. The other thing we added this year is we have our own private label bourbon as well now, which has helped with margins quite a bit. So we worked with a company on developing our own product that we can only sell in our store, but that’s fine, it’s just ours. It’s called Elma Forge, because of our store name and our town name, and people have been loving it. So it’s a good value that also gets us a little extra margin. Wins on both fronts.
Ashley Kehr: We gotta do a BiggerPockets Bourbon and sell it at BPCon. Yes!
Tim Delaney: Florida is one of the states where I’m allowed to ship to, so—
Mindy Jensen: I can’t say actually yes to that, but I sure would like a bottle.
Tim Delaney: If I make it to Orlando, I will try to bring a couple bottles.
Mindy Jensen: That’d be awesome.
Speaker 1: Thanks.
Mindy Jensen: I have invested in a distillery in my town called Dryland.
Tim Delaney: You were supposed to bring me a sample.
Mindy Jensen: Yeah, I will absolutely bring a sample. They have like a sampler pack that I can bring. And they also have larger bottles. So let me know which sampler you like, and then I’ll send you a larger bottle, because I mean, I would never ship alcohol outside of my state. Never, ever.
Tim Delaney: You’re a very good law-abiding citizen.
Mindy Jensen: I sure am.
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Mindy Jensen: So Ashley is focused on the bottom line, not so much on sales right now, and she’s coming at this from a different place. But what is your main focus when you’re thinking about running your liquor store?
Tim Delaney: Bottom line as well. It’s always— you know, the top line doesn’t matter if you’re not making a profit at the end of the day. So protecting the gross margins, so we are very careful that we’re raising prices accordingly when our distributors raise prices. We’re not discounting stuff too much. As I said earlier, we always try to protect our margins, and then we’re always looking for opportunities to make a slightly better margin on certain products, which is why we introduced our own private label that— again, if people want it, they have to come to us, and we can make, you know, slightly more than we would competing against another store for Jim Beam or Jack Daniel’s or any other regular product like that. I would like to circle back to what Ashley was talking about, with seeing the liquor store owner as the cash cow kind of thing, and connecting that to like people that see me now and how I live my life now versus 13 years ago, may miss the point of how much work goes into it. The same way that people might see the way Ashley lives now versus when she bought her first $10,000 house, or however cheap she gets real estate for— so close to me, but I can’t get it that cheap—or like seeing her lay the tile and paint the ceilings and all that kind of stuff. It’s very easy to point at somebody else’s life and say, “Oh yeah, they’re a business owner, they’re a real estate investor, they got”— it’s just, things are easy for them.
Mindy Jensen: Ashley, you are known as a real estate investor. You host the Real Estate Rookie podcast. You own real estate all around the Buffalo area. How has a retail business compared to your real estate business?
Ashley Kehr: Yeah, so very different, in a sense of— when I first started the liquor store, I knew nothing about inventory or management of employees or doing payroll, things like that. So those were all new things to me that I had to learn. And with real estate, I didn’t have to be physically anywhere, and that’s one of the mistakes that I made with having the retail store, is I should have been there in the beginning, like Tim had mentioned that he was for the first 5 years, working in the store. And with real estate, there’s so many automations and tools and things that, even if you’re buying your first rental property today, you don’t have to physically be there. You can use the software, you can collect rent online, you can sign a lease agreement online, you can hire a handyman to go and do the maintenance. I think that it’s very different, and it’s more different than I thought. Back in the day, when they had the BiggerPockets Business Podcast, there is an episode of me, probably in like 2021, bragging about how this is my most passive business, this wine and liquor store. I think it’s off, I don’t have to do anything for it, it’s great, it’s awesome, everyone should do this. And, you know, it just obviously tanked, as we have learned. But I think my biggest lesson was that it’s not a hands-off business, it’s not passive, and you really do need to put work into it. And if I look back at my real estate career, when I did start, it was definitely less passive than it is now. Like, I was the one actually swinging the hammer, doing, you know, the renovations, the rehabs on the project. So that’s, I think, what I didn’t realize. And also, too, like the time commitment of something— I’m very good at starting things. Like, the investor that I worked for, I started an insurance company, I started, you know, I built him all of these buildings, and I was a project manager, and I’d get everything set up and ready to go—a laundromat, dry cleaning, all these things. But then I always hand it off to somebody else to do the day-to-day operations. And that’s what I’ve realized I really enjoy, is starting something and building something. So the wine and liquor store was exciting at first, while I’m doing the renovation, we’re getting our liquor license, I’m hiring people, like getting it set, and then I just hand it off. So that’s something I’ve really learned that I have to work on, is: no, things are not passive, things shouldn’t be hands-off. I still have to do at least asset management, to some extent.
Mindy Jensen: And do you plan on keeping the liquor store?
Ashley Kehr: So we did go back and forth about selling it. Just, let’s get rid of it, let’s basically sell it for the inventory. We have no debt or anything on the store, we own all of our inventory, so we don’t have a line of credit or anything. So we just thought, you know, well, let’s just cash out. But then I didn’t like the feeling of failure. So I’m like, you know what, just— I keep telling my partner, “Let me buy you out, I’m taking this thing, I’m gonna do something with it, let me buy you out.” And he’s like, “Okay, I’ll get you a number, I’ll get you a number.” And he still hasn’t. But for now, I want to see how it goes a little bit. As long as I’m not dumping money into it, I’m fine with sustaining it a little bit longer, just riding it out.
Mindy Jensen: And Tim, your experience was a little different. You were an overnight success, yes, in just 5 short years. And you clearly run a cash cow business, the cash cow business that Ashley was looking for.
Tim Delaney: Golden goose, it just keeps laying eggs with my involvement. You know, something to that point of when Ashley was talking about watching somebody else and just looking at it as, “Oh wow, there’s just a cash cow machine there.” If somebody’s looking at me now, that’s what they might assume about the liquor store as well, versus what went into it 13 years ago, 10 years ago. Like, there was a lot of work, you know, nights and days. Just like Ashley mentioned with her real estate, like early on, she’s laying tiles, she’s painting ceilings, she’s swinging the hammer. People are very quick to look at the overnight success version, the end result of what an investor or business owner does. It’s easy to skip all of the work that went into creating that passive opportunity.
Mindy Jensen: Yes. What is it— luck is when preparation meets opportunity. Tim and Ashley, thank you so much for joining me today and talking about the great ways you can be an overnight success in just 5 short years, as well as some of the things that maybe you shouldn’t do if you want to run a small business and own a small business. I think it was really helpful for people who are thinking about running a business. Tim, where can people find out more about you?
Tim Delaney: The best place is probably my podcast, Business Buying for Financial Independence. In particular, your audience might really appreciate episode 16, which features a guy named Tim Kolb, who heard me on episode 325 of BiggerPockets Money and went out and bought a business last year. It’s a fun story, we connected and talked about it. But you can also find me on Instagram and Threads @TimTDelaney, or at my website, powerofbiz.com. That’s B-I-Z.
Mindy Jensen: Awesome, awesome. I did not know you had started a podcast. I’m gonna have to go back and download some episodes and start listening. I’ve got several long plane flights ahead of me, so this will be great. Tim, thank you again for your time today. And Ashley, where can people find you?
Ashley Kehr: Mindy, I also have a podcast, if you’d like to download some episodes and listen to it. It’s BiggerPockets Real Estate Rookie. We teach people how to get started in real estate. My co-host is Tony J. Robinson. And you can find me on the BiggerPockets forums, just search my name, Ashley Kehr. We also have an Instagram @BiggerPocketsRookie, and then on YouTube, we’re @RealEstateRookie.
Mindy Jensen: And do you want to pitch your liquor store?
Ashley Kehr: If you are in the Southtowns of Buffalo, New York, head on over to North Collins Wine and Liquor.
Mindy Jensen: And Tim?
Tim Delaney: If you’re in the central part of Erie County, it’s Elma Wine and Liquor.
Mindy Jensen: All right, guys, thank you so much again for your time. This was a lot of fun, and we will talk to you soon.
Tim Delaney: Thanks for having me, Mindy.
Ashley Kehr: Thank you so much, Tim, for the advice, and Mindy, for having me.
Mindy Jensen: All right, that was an awesome conversation with Ashley and Tim, and frankly, I have had thoughts just like Ashley since about I graduated from college. I saw this really awesome franchise on the East Coast that I knew wasn’t in the Midwest where I lived at the time, and I thought, this would be great. I will pay the franchise fee, open up this franchise, install a manager, have them run everything, and I’ll just reap all the cash and all the rewards. And I’m really glad I didn’t do that because I absolutely would’ve had a far worse outcome than Ashley because I would’ve put a friend in as the manager and I would’ve not checked in very frequently because everything’s running great. And then all of a sudden I would’ve gotten a really big surprise. I’m glad that Ashley has had this experience in a position where she can go in and fix it. Putting $40,000 into a business is no fun, but being able to turn it around, that’s got to be a huge sense of accomplishment for her. So I’m really, really excited for the future of Ashley’s liquor store. And I don’t get out to Buffalo very often, but when I do, I’m gonna go and check it out. I’m also gonna check out Tim’s store because they have their own whiskey. That sounds fun. All right. That is the end of this episode. We have a website. Hop on over to biggerpocketsmoney.com and check out our newsletter. Check out our calculators and resources, our templates that are all free and all designed to help you on your journey to financial independence. And also check out Tim’s podcast, Business Buying for Financial Independence. If buying a small business sounds like something you wanna do, Tim has a ton of knowledge and he shares that with you on his podcast every week. All right, that wraps up this episode of the BiggerPockets Money Podcast. My name is Mindy Jensen, and I am saying, gotta go, Buffalo.
