This year marks 10 years that I've been in the alcohol industry! During that time, I've created Blue Phoenix: Premium Vietnamese-American rice wine and Eutopia: sparkling mochi sake . I'd like to share my knowledge and provide a step-by-step guide to creating a new alcohol brand. These steps will be specific to California, but 95% of it will be transferrable to any state. In this article, I'll just get straight to the point on what paperwork is needed and approximate fees as of 2025. I'm assuming you did your own research already on what product you want to make and you're ready to start the business. Be sure to check back in, because I will write future articles on navigating other considerations when starting an alcohol business.
Before starting, let's prep for this by noting that you should plan to spend about $3,500 - $5000 and all of this may take up to 1-3 months to complete (mostly due to state alcohol license background checks). This is also for a Beer & Wine license, which cities don't set a limit on. But, for liquor, there are only a certain number out there and for popular cities you'll need to get on a wait-list (doubtful to work) or purchase from an existing owner. The best advice I can give you is to google {your city} and "liquor license" to see what brokers or websites are out there to help.
Here are the 9 steps to get you started!
1. Create the business entity ($70 + $800/yr). You can decide whether you want to create an Limited Liability Company (LLC), Sole Proprietorship, Partnership, S Corp, or C-corp but I ended up going with an LLC. I wanted some protections that an LLC will grant and just starting up I wasn't big enough to start an S or C corp. It's not necessarily recommended, but with an LLC you can get through the "friends-and-family" fund raise via SAFE Notes. Once you reach Series A, you'll want to create a S-corp (~$30k cost) or a C-Corp (if > 100 shareholders) (same cost) with a lawyer. To create the LLC in California, you'll first want to search the Secretary of State Business Search to determine a unique name. Then, fill out form LLC-1 and submit it online. Keep in mind that within 90 days you'll need to submit your Statement of Information via your online login (and every other year thereafter). You'll also login to pay the $800 fee every year.
2. Create an Employee Identification Number (EIN) (free). Creating an EIN is easy and you'll need to have it handy for anything tax related. Note that it asks you business name so that's why you needed to complete step 1 first. The process is very straight forward, just go to the IRS website here. Save a pdf of your EIN (it's called an SS-4 form) and have it handy.
3. Create an Operating Agreement ($99 on legal zoom or use this template). I think I paid $300 to have my operating agreement made but I'm here to help YOU so I created a template out of it. Please note that to be safe you should consult a lawyer or law services business. By using the template you agree that I hold no liability if you choose to use this document.
4. Get a business bank account (free, but minimum balance of $500-$1000). You wont' get too far without being able to spend money, so the next step is creating a business bank account. To create a business bank account make an appointment at your local branch. Any of Chase, Wells Fargo, or Bank of America are easy as well. For convenience, it may be best to go with whatever bank you have for personal use. That way you can check both with one login. Note that if you drop below the minimum balance, you will get charged something in the range of $30/month. Make sure you know this number and don't drop below it.
5. Get a business credit card (free). Now that you have a bank account you'll want to setup a line of credit. You can literally spend days contemplating on which credit card is best for your business but I think Nerd Wallet does a good job summarizing the latest options here. When you create your bank account, they will probably offer you a credit card. It's ok to go ahead and use that to get started but soon thereafter you'll want to sign up for a card with decent rewards.
6. Obtain a Business License (~$200). Do a google search of "business license" with your city name to figure out how to get a business license (example, San Francisco's business license link is here). It's super easy and I recommend you do sign up for any emails from the city related to businesses if given the option.
7. Register with the Alcohol and Tobacco Tax and Trade Bureau (TTB) (free). The TTB is the federal governing agency for alcohol (whereas Alcoholic Beverage Control (ABC) would be the state level governing agency for California, for example). Read here to get started. You'll work with TTB to register your business, get your formula approved, and get your label approved. Note that it is up to your producer to get your formula and label approved so you will need to work with them to get it done before you can sell.
8. Get state alcohol licenses ($1,085, variable by state and business operations). Similar to what you did for your business license, simply google "alcohol license" and your state. For me, California's is called ABC. The forms for a new license are here. There are a LOT of forms and the instructions are not as straight forward as other authorities, so make liberal use of the directory and visit them to review your documents or give them a call/ email to answer quick questions. Here are the license types - I hold type 9 (Beer and Wine Importer), type 17 (Beer and Wine Wholesaler), and type 20 (Off-Sale Beer and Wine - online sales). Depending on the license type, it may cost more for the initial applications (N/A for my licenses ) and then less annually (type 9 - $145, type 17 - $470, type 20 - $470).
9. Create a State Tax account (free). When you sign up for a business license, they will send your information to the state and the state will collect taxes from you via their online portal. For California, that's the California Department of Tax and Fee Administration (CDTFA). To start, you'll need to register for a permit. You'll want to immediately call (1-800-400-7115) or email them requesting an annual schedule or else you'll get emails every month to submit your sales. If you have low volume they will allow annual reports. Another thing you'll want to do while you're here is download the California Resale Certificate (CDTFA-230). When you purchase items wholesale you can avoid being charged tax by providing this form to your supplier - as sales tax is charged to the end customer only. These rules also apply to you as a seller, you will need to collect tax for online sales to end customers but not to distributors or anyone who is going to re-sell your product. Also of note on this point is that in California, a wholesaler's license (type 17) will allow you to sell direct to retailers - giving you a nice advantage in your early days before you have distribution. I don't want to get into it too much here, but I will write a future article on navigating all of the complicated laws related to alcohol sales.
Well, that was a huge pain-in-the-ass but now you're set to legally operate as an alcoholic beverage company! Please check back for future articles with more tips for running an alcohol business!
Some future articles:
- Learning about the alcohol business (key articles and books to read first)
- Should I start a beer, wine, or liquor business? (pros and cons of each)
- Finding an manufacturer (what makes a manufacturer good or bad?)
- Running the operations of an alcohol business (3-tier system, price mark-ups at each stage, distribution, online sales)
- Sales, marketing, and taxes (grow and get a hold of your finances)