Selling your brewery: getting the numbers ready

Why preparation changes the price

A buyer reduces the offer for everything they cannot verify. Messy accounts, undocumented stock and unclear licence status all lead to a lower price or a failed deal. Preparing the numbers early gives you time to fix problems and a story to tell. Our guide on how breweries are valued explains the methods a buyer will use.

Start well before you plan to sell. Twelve to twenty-four months is not too early.

Clean, monthly accounts

A buyer wants at least three years of accounts, monthly if you have them, that reconcile to the bank and to the tax filings. Separate personal spending from the business. Record every cost where it belongs. If the owner's family is on the payroll, say what each person does.

Ask your accountant to produce management accounts: sales, cost of goods, gross margin, overheads and profit, by month and by channel. Add a balance sheet and a cash flow statement.

Adjusted earnings

Buyers usually look at earnings adjusted for one-off and owner-specific items. They add back costs that a new owner would not have, such as an unusual legal bill. They deduct a market salary for the owner's own role. Here is a small illustration in currency units. Reported profit before interest, tax and depreciation is 1,000. A one-off legal bill of 100 is added back. The owner took no salary but the job is worth 300 a year. Deduct that. Adjusted earnings are 800.

Do the exercise yourself, with evidence for each item. Keep an invoice, a contract or a payslip behind every adjustment. Also look at margin by product and by channel. Look at the share of sales that comes from your three largest customers. A buyer will ask both questions. A brewery with half its sales in one account is worth less than one with the same sales spread widely. A buyer who finds an unsupported add-back loses trust in the whole schedule.

Stock, equipment and the cold room

Make a register of equipment with age, condition, maintenance records and any finance outstanding. Count stock at a known date and value it consistently: ingredients, packaging, beer in tank and finished goods. Note beer near or past its best-before date, since it has little value. A buyer will inspect, so tidy the brewery. A clean, well-kept plant says something about the beer. Fix leaking valves, label every tank and update the maintenance log before visitors arrive. Run a quality check as well: keep records of gravity, pH and taste panel results for each batch, since a buyer wants proof that the beer is consistent. If you hold any food safety certification, put it in the folder.

Licences, contracts and the brand

Gather every licence, approval and renewal with dates. Alcohol is a state subject in India. Whether a licence passes to a buyer or must be reissued depends on the state and the process. Take advice from a licensing adviser and a lawyer early. Also collect your leases, supplier terms, distributor agreements, employment contracts and trademark registrations. Check that the brand and recipes belong to the company.

The data room and the story

Organise it all in one folder, labelled and dated: accounts, tax, licences, contracts, equipment, stock, staff and customers. A buyer who finds everything in one place sees a business that is run well.

Add a short information memorandum: what you make, who buys it, how it has grown, what is next. Keep it to a few pages. Include a one-page summary of the monthly figures, the main customers by share of sales and the people who run the brewery day to day. A buyer will also ask why you are selling, so have a plain, honest answer ready, since an evasive one raises more questions than any number. State only what the documents support. Your numbers sit at the heart of it. Seasonal patterns deserve an honest explanation.

Get help

We prepare business health reports and investor packs for breweries, led by Ankur Napa. We can review your numbers as a buyer would. We do not value a business for a sale price, run the legal side or promise a buyer. Work can be done remotely by video call and shared data, with site visits by arrangement.

Common questions

How far ahead should I prepare to sell?

Twelve to twenty-four months is sensible. It gives you time to fix accounts, reduce dependence on you and show a clean trend.

What is an add-back?

A cost in your accounts that a new owner would not have, such as a one-off legal bill. Each add-back needs evidence.

Will the buyer inspect the brewery?

Almost certainly. They will check equipment, stock, cleanliness and records.

Can I transfer my licence?

It depends on the state and the process at the time. Ask a licensing adviser and a lawyer early.