Explore an intriguing liquor store deal in Washington, D.C., boasting impressive annual revenue and a low asking price. The hosts debate the nature of business valuations and the allure of investing in liquor despite shifting consumption trends among younger generations. They discuss the significance of location and customer demographics while addressing the cultural impacts of alcohol and underage drinking. Listen in for a nuanced look at a profitable business with potential risks and rewards!
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insights INSIGHT
Asking Prices Are Just Starting Points
Asking prices on small businesses are often arbitrary and don't determine true value.
The real value is what a buyer will actually pay in a negotiated deal or auction.
insights INSIGHT
Terms Drive Business Valuation
Valuations vary widely because terms and buyer motives change the economics.
The only valuation that truly matters is the one backed by someone actually writing a check.
volunteer_activism ADVICE
Don't Treat SBA Appraisals As Gospel
Don't rely on third-party SBA appraisal reports as definitive valuations.
Treat appraisals as noisy inputs and focus on buyer-specific economics and diligence.
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In this episode the hosts break down a surprisingly solid liquor store deal in Washington, DC, questioning whether a 3x multiple and $500K SDE is too good to be true.
Business Listing – https://www.tworld.com/buy-a-business/listings/80yrs-old-sba-appd-profitable-corner-liquor-biz-in-nw-dc-
Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.
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This week, the team reviews a long-established liquor store in Northwest Washington, DC. With $2M in annual revenue and $500K in SDE, the business is priced at $1.4M—plus $290K in inventory—putting the effective multiple just over 3x. The store has been operating since 1941 and sits on a corner in a high-traffic, high-income neighborhood with a 10-year lease at $9,500/month.
Key Highlights: - Asking price: $1.4M + $290K inventory, SDE: $500K - Liquor store in DC proper with 80+ years of history - 10-year lease at $9,500/mo in a high-income area - SBA-preapproved (though Heather warns that means nothing without tax returns) - Macro headwinds in alcohol consumption vs. 10% YoY sales growth
Acquisitions Anonymous - #1 for business buying, selling and operating