How To Appraise Your Liquor Store

Although it is always recommended to work with a certified business broker to precisely appraise your business, you can estimate your business worth by yourself if you are looking to sell your liquor store.

How to Estimate Your Liquor Store’s Worth

You may be on the verge of selling your liquor store, but want to have an idea of what that means for you financially. For most sellers, having a ballpark number of your business’ worth will be a deciding factor in whether it makes sense to proceed with a business broker or not. Use these tips to get that estimate number by yourself.

Review Permits

 

Permits are everything for a liquor store. Although permits cannot be transferred to a new owner (in most states), it is important to be compliant at the moment of sale. This adds value to your business and gives a full understanding of regulations and compliance rules to potential owners.

Add Up Inventory

You’re going to allocate some time for this one, but it is a very important step in your evaluation. Add up all inventory, including equipment, and add it up at its purchase value, including any depreciation on equipment. This is the start to your appraisal, and having these numbers available for your business broker will help speed up the process.

Review Financials for Past 3 Years

Having a perspective on your financials for the past 3 years gives you a profitability analysis that can be used to position your liquor store at a higher value. Of course, a business that has been profitable for the past 3 years automatically increases your valuation. Make sure you include everything, including cash handled and other profits.

The Formula

After evaluating your financials for the past three years, follow these steps to get an estimate for your business:

  1. 40-50% of the Store’s Annual Revenues: Average your total revenues for the past 3 years and multiply times 40 – 50. (Write down both numbers as a low and high point)
  2. Multiply Your Total times 45%
  3. Add Your Inventory and Equipment Value
  4. Licenses: If your licenses are current and in compliance, your number may increase. However, it is important to remember that licenses cannot be transferred to new owners.

Why Jan Wild?

With over 35 years of experience in buying, selling and advising businesses, Jan Wild will help you in the process of selling your liquor store and make sure you don’t miss any important steps along the way. Contact Jan to schedule a free consultation and get the most for your business today.

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