Liquor Store Valuation Insights That Drive Value
What to expect from your liquor store valuation
As the beer, wine and liquor store industry grows, so does the business valuation of liquor stores. Though buying or selling a business can be stressful, the business valuation process doesn't have to be. We've calculated the results over 25 years of liquor store valuations, including data about cash flow, average revenue and SDE multiples, and pulled it together into a one page download that will help you along the valuation of your liquor store. Looking for more insight into the business valuation process? Check out our Business Valuation Guide to learn how you can share your business's story for fair and reasonable consideration.
What could affect the business valuation of my beer, wine or liquor store?
Data concerning the liquor store industry is where your valuation will start. The liquor store industry includes any business that sells alcoholic beverages, including beer, wine and liquor. According to 2022 industry data, there are almost 45,000 liquor stores in the United States. A few of these key data points are included in what we call market multiples. These are the ratios that business appraisers are experts in. However, there are a few other variables that play into your valuation as well. Some of those variables are:
- Location: Due to state-specific liquor laws and licensing regulations, location plays a big factor. In some areas, licenses required to own and operate a beer, wine or liquor store can add a great deal of value, depending on the market value of the license. The physical building your store is in makes a difference, too. This is based on real estate values, but attractive signage can be helpful, as well as proximity to other stores.
- Size: Sale pricing offered by larger stores can often result in lower margins, which in turn results in a lower value. Smaller companies that focus on one kind of alcoholic beverage could have higher margins.
- Involvement of Owners: This is one factor that always plays into business valuations. Typically, the less a business relies on the owner, the higher it is valued.
- Mix of Products: Stores that sell primarily wine are more valuable than those that sell mostly liquor or beer.
- Overall Financial Health: An appraiser will look at 3-5 years of financial statements to determine the growth of your company, cash flow and debt management. Valuations also depend on how your business is performing compared to peers.
To learn more about the quantitative data we take into consideration when performing a liquor store valuation, download our Beer, Wine & Liquor Stores Market Intelligence Report.
Why would I need a valuation of my liquor store?
There are lots of reasons to obtain a business valuation, but some of the most common are business planning, determination of tax liability and deciding on a reasonable price to sell a business. Different kinds of people may ask you for an appraisal for your business including lenders, business brokers, financial advisors, accountants or attorneys. Valuing a business requires technical knowledge, but also human wisdom and experience to ensure that less tangible variables are considered appropriately. At GCF, we wrote the book on Small Business Administration valuations. If you have questions about valuing your business, reach out to us and a GCF appraiser will get in touch.
Business Valuation Accreditation
Your GCF Business Valuation appraisal team has one or more of the following business valuation accreditations:
- Accredited Senior Appraiser (ASA) - is recognized as having achieved the highest level of education, training, and report writing for business valuations. The ASA designation is the gold standard for a business valuation professional. (source: American Society of Appraisers)
- Certified Business Appraiser (CBA) - a very prestigious credential in the eyes of all who are familiar with it as it earned the reputation of being a difficult credential to obtain. (source: National Association of Certified Valuators and Analysts®)
- Certified Valuation Analyst (CVA)
- Accredited in Business Valuation by the American Institute of CPAs (ABV by AICPA) - a credential granted exclusively by the AICPA to qualified valuation professionals who demonstrate expertise in valuation through knowledge, skill, experience, and adherence to professional standards. (source: American Institute of CPAs)
- Accredited in Business Valuation (ABV) - credential is granted exclusively by the AICPA to CPAs and qualified valuation professionals who demonstrate considerable expertise in valuation through their knowledge, skill, experience, and adherence to professional standards. (source: American Institute of CPAs)
- Certified Public Accountant (CPA)
Over 25 years of experience and expertise in business valuations and appraisals. An accredited appraiser receives extensive training, remains in good standing, and follows specific industry practices to determine the value of a business.
GCF's Machinery and Equipment Appraisal Accreditations
- Expert Equipment Certified Appraiser (EECA) - Our appraisers are recognized with a deep understanding of valuation principles and extensive experience by the Institute of Equipment Valuation.
- Certified Machinery and Equipment Appraiser (CMEA) - a CMEA professional has the expertise and certification to conduct a third party machinery and equipment appraisal.