Brewery Valuation Question

I received this email a while back about brewery valuation and sale and wanted to share…


We are a small brewery about to celebrate our 4 year anniversary. I think our growth has been strong over the 4 years since we have doubled capacity year over year. Our sales are primarily taproom (beer only) and we do about 12% wholesale distribution to some friendly bars. Topline over the past 2 years has been $800k and $990k. Past 2 years EBITDA has been $175k and $205k respectively. I am the sole owner and take a $100k salary per year and take another $50k in distributions. The rest is reinvested in the business. I feel confident in my ability to run a business however, I need to start planning my next move. Do I look to sell? Expand? Duplicate? What would a valuation come back at?

First off, thank you for the detailed information. I get so many cryptic emails, and when I get detail like this, I must applaud.

My likes:

  1. Major cash flow from taproom
  2. Decent topline to EBITDA growth
  3. Running lean

My concerns:

  1. Bar or Brewery?
  2. Capacity ceiling
  3. Expansion – Entering a craft beer plateau

My advice to this owner is, keep doing what you are doing!

You have tailwinds in your current operations. If this model works, duplicate it!

If you want to build something bigger, learn the distribution game, because the current model is a high profit bar.

As for brewery valuation and sale; you are not there yet. This size business is not attractive, but two or three of them may be.

Create a tangible vision, maintain these numbers for another 2-3 years, then start talking valuation.


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