4 Questions to Ask Before Selling a Brewery

Posted On: 01/11/2017 / By:
Selling A Business

info about selling a breweryIn the last couple of decades, the beer industry has undergone a major change. These days, consumers are increasingly choosing small-batch craft beers over their conventional, big-name counterparts.

According to the Brewers Association, a nonprofit organization that promotes and protects American craft brewers, at the close of 2015, the U.S. had more than 4,000 operating breweries. Given that in 1990, the U.S. was home to only 284, the industry is experiencing explosive growth, which is great news if you are contemplating selling a brewery this year.

1. How Much Is Your Brewery Worth?

The first step in selling your brewery is figuring out how much your brewery is worth so it can be listed for sale. Calculating your brewery’s worth (also known as its valuation) is a complicated process that involves many factors; from the brewery’s net profit to rate of return to asset value to equipment and inventory.

Unless you are familiar with the business valuation process, it is smart to enlist the expertise of a professional firm, such as Sunbelt Business Brokers. Business brokerage companies will have extensive databases and sophisticated software which allow them to determine your brewery’s formal business appraisal. Many of Sunbelt’s brokers are also certified business appraisers.

2. Is the Market Right for Selling a Brewery?

The craft brewing industry contributed $55.7 billion and more than 424,000 jobs to the U.S. economy in 2014, which means the market as a whole is thriving. But it is important for you to do your own research; review the market on a local level, collect information on area competition, and crunch the numbers. Consider the economic impact of the craft beer industry in your state, if it’s sizable, you could potentially seek a higher asking price.

Supply has kept up with consumer demand, and independent breweries are popping up all around the country, creating fierce competition. But with trend forecasts predicting that America’s thirst for microbrews isn’t going to be quenched any time soon, if you are considering selling a brewery, the near future may be your best bet.

3. When Is the Right Time to Sell a Brewery?

As a general rule of thumb for any business sale, it is best to list your brewery for sale while it is still turning a profit. Businesses are harder to sell if they are listed after they have begun to show losses quarter over quarter.

4. Who are potential buyers?

Large, mainstream breweries–such as Anheuser-Busch InBev who has bought nine craft breweries so far, including Goose Island, Breckenridge Brewery, and others–are acquiring smaller, established beer brands left and right, and could potentially be interested in your independently-owned brewery.

Potential buyers could also be found in your competition. Breweries in your area of similar size could be interested in purchasing your operation. It is a good idea to list your brewery with a business brokerage company, like Sunbelt, to successfully reach a large pool of potential buyers. Sunbelt Business Brokers advertises more business-for-sale listings than all other major competitors’ combined, and can weed out unreliable bidders from credible offers.

If you’re relocating, retiring, or have just lost your taste for the brewery business, contact Sunbelt Business Brokers. With more than 35 years of experience, Sunbelt is the place to go to buy or sell or business. Find your local Sunbelt office here.

John Davies

After obtaining his MBA, John began his career at PriceWaterhouseCoopers, the international accounting and consulting firm, and subsequently joined Progressive Corporation, a large U.S. based insurance company. John was a Division President at Progressive and subsequently became the CEO of a New York based private equity investment company. In 2001, he founded MMI as a platform investment company and MMI has subsequently acquired 10 additional companies. John is also the founder and co-owner of MMI Capital Partners and SFI Investments, LLC, a registered broker dealer.

John’s professional credentials include being a Certified Public Accountant (CPA), Certified Business Intermediary (CBI), Series 7-General Securities Representative, Series 24-General Securities Principal, Series 63-Registered Representative and Series 79-Investment Banking Representative, Chartered Financial Consultant (ChFC), Chartered Life Underwriter (CLU) and Chartered Property and Casualty Underwriter (CPCU). He is a frequent speaker on various business topics and served as the subject matter expert for the writing of “Selling Your Business For Dummies,” a Wiley Press publication.

John and his family live in Cleveland, Ohio and are actively involved in the community. He currently serves on the Board of the Rock and Roll Hall of Fame, the Cleveland International Film Festival, The First Tee and Jump Start.

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