How to Sell Your Liquor Store
The coronavirus has changed how consumers interact with retailers, including liquor stores. Accenture points out that the home continues to be the place where most consumers shop, and that online purchases are replacing visits to physical stores.
Liquor stores are often stable businesses that are less affected by economic downturns, and many stores have been able to retain customers during the pandemic. If you’re interested in selling your store, you may find a number of motivated buyers.
This article explains the factors that make your business valuable, and the steps you must take to prepare for sale. You’ll read about the benefits of working with a business broker, and how the experts at Raincatcher can serve as your trusted advisor.
What makes a liquor store attractive to a buyer?
The Value Proposition
Successful owners change their product offerings based on consumer tastes in order to build strong customer relationships. Assess your business and determine which of these traits apply to your business:
Uniqueness in the market
Consumers like to shop at liquor stores that provide a great selection and are staffed by knowledgeable employees. Preferences change over time, and successful owners adapt to change. If your clients start purchasing more wine products, you can add to your wine selection and educate your staff.
Location
Location is critical for retail liquor stores. Customers want a store that’s easy to access, and one that has plenty of parking. A growing number of grocery stores and big box retailers are carrying liquor, and you need to make your location attractive to the customer base. Motivate customers so they keep coming back to your store.
Financial track record
A liquor store that can generate consistent profits and cash inflows will stand out from others in the industry. Fortunately, customers pay with cash or by credit card which improves cash flow.
Recurring revenue streams
Consider this quote from the Harvard Business Review: “Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.”
Valuable companies generate repeat business, which leads to a consistent stream of revenue. A liquor store that keeps customers coming back is a valuable asset.
If your store has some of the traits explained above, you may decide to explore a business sale. There are several steps you can take to prepare for a possible sale.
Preparing for a Sale
Take action on these issues so that your business is well positioned for a sale. The steps to prepare for sale include planning operations and reviewing accounting issues, among others.
Planning your operations
Analyze your company operations and document all routine tasks in a procedures manual. Using a manual reduces confusion about each task, and also serves as a training resource for your staff.
Minimizing the risk of theft is a big issue for many liquor stores. Your business may generate a large number of cash sales, and liquor stores often have hundreds of items in inventory. You can utilize security cameras, point-of-sale systems, and accounting controls to prevent theft.
Make sure that you’re in compliance with zoning laws, and that your business permits and liquor licenses are current.
Consider your accounting system
Assess your accounting system, and use technology to save time and to produce accurate financial statements. Use software to manage accounting, payroll, and other scheduled tasks.
Perform a physical inventory count to confirm that the dollar amount of inventory on hand matches the physical item counts in the store. Review your fixed asset listing and verify that your refrigerators, furniture, and other assets are posted to the accounting records. Ask an accounting firm for help with these issues.
Review business contracts
Review your contracts with partners, employees, and vendors. Many of these agreements must be changed if you sell your business. Find out where your contracts stand now, so you can make plans for an eventual sale.
A business sale requires careful thought and planning, and a business broker can be your trusted advisor along the way.
Work With a Business Broker
The business purchaser needs to maintain your store’s customer base and keep all required licenses in place to succeed. A sale is a complicated process; a business broker can operate as your trusted advisor until the transaction is closed.
Brokers have years of experience selling businesses, and they may find ways to increase your store’s value before a sale. Work with a business broker to get your records in order and to prepare for due diligence.
Every industry is unique, and brokers can help you market your store to a targeted group of prospects. Brokers also perform valuations so that you know what a reasonable sale price is for your business.
A Trusted Advisor
The experts at Raincatcher, can serve as your trusted advisor until a sale is closed. They understand that selling your business may be the most important financial decision you will ever make. You worked hard to build a successful business, and the Raincatcher team can help you close a sale at an attractive price.
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