Field Notes: Profitable Alcohol Distribution Business

A Peek at an SBA Pre-Qualified, Profitable, Miami-based Distribution Business

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I recently came across an opportunity that looks to check nearly every box an acquisition entrepreneur could think of. SBA pre-qualified? Check. Profitable? Check. Long-term operations? Check. Owner retiring? Check. Owner willing to provide extensive turn-over? Check.

This looks to be a solid business with an established client base, strategic location, and comprehensive operational setup. The asking price looks justified by the company’s profitability, assets, and market position. However, the buyer needs to carefully diligence the sustainability of customer relationships, and the feasibility and legality of integrating new digital marketing strategies. The commitment of the owners to provide extensive training post-sale and the possibility of owner financing along with SBA pre-qualification are favorable terms that should facilitate a smooth transition.

If it turns out to be a financial disaster, with nearly a million in inventory, you can drink your problems away. And you’re close-ish to Key West!

Financial Overview

• Asking Price: $2,650,000
• Cash Flow: $546,600
• Gross Revenue: $2,743,100
• EBITDA: Not specified
• FF&E (Furniture, Fixtures, & Equipment): $175,000 (included in the asking price)
• Inventory: $995,000 (not included in the asking price)
• Rent: $9,250 per month

Business Operations

• Location: Miami, FL (Relocatable within Miami-Dade County)
• Industry: Alcohol import and distribution
• Established: 2008
• Employees: 11 total (including a general manager and a sales team of 7)
• Facilities: 9,000 sq ft warehouse with office space

Analysis

Valuation and Price Justification:

• The asking price is roughly 4.8 times the annual cash flow, seems reasonable for a distribution business with established operations and significant tangible assets.
• The significant amount of inventory required at closing does add a considerable upfront cost, which will impact the total capital required.

Strengths:

• Established business with a broad client base, including more than 250 clients across restaurants, retailers, and local distributors.
• Holds essential import and distribution licenses, crucial for operating in this industry.
• The business is described as recession-resistant

Risks and Considerations:

• The high dependency on the current owners for business operations could pose a transition risk.
• The inventory requirement at closing significantly increases the initial investment.
• Absence of digital marketing tools like a dedicated web page and social media presence could limit potential market reach and customer engagement. Then again, there are rules for marketing alcohol products.

Opportunities for Growth:

• Potential to expand digital marketing efforts to enhance brand visibility and client engagement within what the law will allow.
• Expansion of sales territories beyond the current regions could drive revenue growth.
• Diversification of product offerings to include newer or exclusive alcohol brands could attract a broader client base.

Market and Location:

• Located in Miami, a key hub for import and distribution given its port facilities and cosmopolitan demographics.
• The existing territories cover Florida, North Carolina, and the Bahamas, providing a good mix of local and international markets.

What do you think? Check it out and let me know!

About: Silverwave Field Notes combs through and analyzes thousands of businesses available for sale that may be of interest to entrepreneurs looking to acquire an existing business. We are not affiliated with the business listed for sale unless otherwise disclosed.