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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question_answer ANECDOTE
Appraisers Ask For The Answer
Michael recounts appraisers calling to ask listing or offer prices before issuing a valuation.
He says appraisers often solve for the price rather than independently valuing the business.
volunteer_activism ADVICE
Check Lease And Location First
When evaluating a retail business, prioritize lease length and location above many other factors.
Long, stable leases on prime corners materially reduce execution risk for buyers.
insights INSIGHT
Include Inventory When Measuring Multiples
The listing shows strong reported margins and growth, but inventory is quoted separately.
Effective purchase multiple must include inventory and working capital to reflect true economics.
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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