Practical steps to boost value before putting your store on the market
Selling your liquor store is a big decision—one that can set the stage for your next business venture or retirement. The price a buyer is willing to pay depends on more than just sales numbers. By preparing your store and business records before listing, you can attract serious buyers and command top dollar. Here’s how to do it.
1. Get Your Financials in Order
Buyers (and their lenders) will want to see clean, verifiable financials.
- Provide at least 3 years of tax returns (income, sales and payroll), profit & loss statements, and balance sheets. You will also need to provide a distributor statement history, credit card merchant statements, and bank statements.
- Use accurate inventory accounting—overstating or understating stock can scare buyers, especially in an industry historically known for unreported cash sales. Electronic POS systems are desirable in comparison to old outdated manual systems.
- Be sure your POS reports, bank statements, and sales tax filings are consistent with reported sales when compared against each other.
- Reduce or eliminate personal expenses run through the business—they can make your profits look smaller. These can include cell phones, automobile leases, insurances and other personal expenses paid by the business.
Tip: The cleaner and more transparent your books, the more confidence a buyer has—and confidence drives higher offers. It also enhances the ability for a buyer to secure lender financing.
2. Secure a Strong Lease
If you rent your location, a good lease can significantly boost your store’s value. Relocating requires a long regulatory process and is expensive, so the value in the business to a buyer is often that it is turn-key and ready to be operated for a significant period at the current location.
- Negotiate favorable rent relative to sales volume.
- Ensure long-term stability with renewal options.
- Confirm the lease allows liquor sales and can be assigned to a buyer with landlord approval.
3. Maintain a Well-Merchandised Store
First impressions count.
- Keep the store clean, well-lit, and organized. This includes the retail store space as well as storage areas.
- Remove dusty or outdated inventory from shelves.
- Maintain attractive product displays and signage that meet SLA rules.
- Ensure coolers, shelving, and POS systems are in good working order.
- Eliminate surplus product that is slow selling by having inventory reduction sales. Buyers will be reluctant to purchase this inventory so eliminate the issue before you put the store up for sale.
4. Strengthen Supplier Relationships
Reliable supply lines and favorable purchasing terms are valuable to buyers.
- Maintain current accounts with distributors—no credit holds.
- Do tasting and educational events to strengthen supplier relationships.
- Offer proof of consistent product availability and customer favorites.
- Consider working with online ordering apps like Drizzly and third party delivery providers and show convenience to customers with these options.
- Consider partnering with local wineries and distilleries for pairing dinners to feature locally produced products and provide a convenient place for customers to buy them. Run special promotions to draw customers and increase sales after the event.
5. Diversify Revenue Streams
A store that sells more than just bottles can stand out.
- Expand into premium wine selections, gift baskets, glassware, or mixers allowed by SLA rules.
- Consider establishing a premium program like a bourbon club that provides hard to find and limited supply products to collectors and aficionados.
- Build strong holiday and event sales promotions.
- Develop a loyalty program that can transfer to the new owner.
6. Build a Strong Customer Base
A loyal customer base makes your store’s income more predictable.
- Develop a customer database that can be used for social media and email marketing.
- Focus on customer service and staff training. Teach the art of upselling and suggesting other products for customers to try. Teach staff popular and trending cocktail recipes.
- Keep a rewards list—a valuable marketing asset for a buyer.
- Maintain active social media and community presence. Have a reputation for supporting local charities and sports teams.
7. Resolve Legal or Compliance Issues
Outstanding SLA violations or tax problems can reduce value or kill a deal.
- Clear up past SLA infractions and ensure there are no barriers to transfer applications being processed.
- Pay any outstanding sales or excise taxes and bring all distributor accounts up to date. Be sure you are not on the “COD list.”
- Ensure the store meets all signage, display, and hours of operation rules.
8. Plan for a Smooth Transition
Buyers will pay more for a business that’s ready to hand over without disruption.
- Have written procedures for ordering, receiving, and merchandising.
- Prepare an employee roster with job descriptions.
- Offer a training period as part of the deal to reassure the buyer. This will be especially important to new owners who may have worked in a liquor store but not owned one and have not been responsible for all aspects of operations.
- If appropriate, reach out to key vendors to learn what the process would be to transfer contracts or accounts (e.g., website, digital marketing, leases, POS systems, merchant credit card processor systems).
9. Work with Industry Professionals
Selling a liquor store involves unique rules and valuation considerations.
- Hire an attorney experienced in NY liquor law to structure the deal and handle SLA requirements.
- Use a business broker who understands the liquor industry to market to qualified buyers.
- Get a professional business valuation so you know your realistic asking price.
Bottom Line
The best purchase price comes from reducing buyer uncertainty, highlighting profitability, and presenting a store that’s turnkey-ready. With clean books, a strong lease, loyal customers, and no compliance issues, you can position your liquor store as a high-value investment—and negotiate from a place of strength.
Tracy Jong is a Senior Attorney at Evans Fox LLP with 30 years of experience focusing her practice in business law, intellectual property and licensing for alcohol and cannabis. Tracy Jong is a member of the New York Bar and is a registered attorney at the United States Patent and Trademark Office. She can be reached at [email protected].
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The content has been prepared for informational purposes only; it should not be construed as legal advice, does not create or constitute an attorney-client relationship, and readers should not act upon it without seeking professional counsel.