Buying A Liquor Store - When Do I Perform The Inventory Count?

Comments & Replies: 7     Views: 17303     Posted By: Peter Siegel MBA  Peter Siegel MBA: BizBen Founder, Lead Advisor

The only time to get an exact and accurate inventory count, and valuation, is at the time the business is being transferred. To do so beforehand, would mean that any merchandise sold after inventory is taken, but before close of escrow - Peter Siegel, MBA with BizBen & others discuss this topic.

Topics: Buying A Business, Escrow Closing Issues     Tags: buying a business, escrow bulk sales, inventory



The only time to get an exact and accurate inventory count, and valuation, is at the time the business is being transferred.

To do so beforehand, would mean that any merchandise sold after inventory is taken, but before close of escrow - assuming the store remains open and some merchandise is sold before the deal is finalized - would enable the seller to collect the proceeds from any merchandise sales as well as receiving the wholesale value of that merchandise, even though it no longer is part of inventory and cannot be transferred to the buyer.

As an example, if a bottle of scotch whiskey is counted during inventory, and included in that count when inventory value is made part of the escrow, but actually was sold while the escrow was being conducted, the buyer will have paid for it, but won't have it on the shelf to sell when he or she assumes ownership.

Typically, the store is closed for the inventory count to avoid this problem. Alternatively, the store can remain open while escrow is conducted, with the store clerks making careful note regarding the sale of each item, so the inventory count can be adjusted to allow for what was sold.

Contributor: Business Appraisals, Valuations Advisor

After business hours or on slow days. I know that is hard to do with your business but those are the best times.


From the past transactions, we usually see the buyer and seller perform inventory count within 48 hours from close of escrow or at least a day before the close of escrow. In the opening escrow, buyer and seller usually agree on a rough estimate of the inventory amount and once parties complete the inventory count, then the escrow holder is notified of the exact figures so it can be incorporated into the escrow closing documents.

Contributor: Business Broker, SF Bay Area

Usually I recommend doing the Inventory the night before Close of Escrow. Then next morning you can take the Inventory information to Escrow to have them update the final price based on the actual inventory. There are Inventory services who will do the Inventory lot faster than you would do it on your own. If the Seller keeps the cost information handy that speeds up the process. Otherwise you can use the retail value divided by the normal markup for that kind of an item to arrive at the cost. If there will be a gap between when the Inventory is done and the date for close of escrow, then have Seller keep track of the sales during the interim period and then reduce the Inventory count by what Seller sold during that period. Usually Seller can arrange not to purchase any new inventory during those few days.


Usually the inventory is done the night before closing - buyer/seller can do inventory together OR there are companies out there that will do it for you.


I would assume you did a cursory inventory assessment prior to entering into any contract to purchase as a start. We always try to do a final inventory the night (ideally after hours) or day before closing and then all proceeds (upward or downward) are adjusted by escrow. This way "you get what you pay for" and there's no shenanigans.


  Helpful Resources To Assist In Selling And Buying California Businesses
Timothy Cunha JD, Business Broker: SF Bay Area

SF Bay Area experienced attorney, & business broker. I & my EvergreenGold team offer owners sound advice & expertise to build business value & achieve profitable sales. For a FREE business evaluation & SWOT analysis for your business call me direct at 650-600-3751, 650-866-5393 Text.

Shalonda Chappel: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.

Manjit Singh, Business Broker - SF Bay Area, Central Valley

Assistance in the SF Bay Area & Valley. Contact me about buying or selling a restaurant, liquor store, gas stations, markets, and c-store businesses. If you are looking to buy or sell a SF Bay Area, Central Valley liquor store, market, c-store, restaurant, etc phone me direct at 510-417-9429 Cell.

Ryan Clark, Business Broker: Southern California

The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan, Business Broker at 310-652-8353.

Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

Jack Oh, Business Broker: Southern California

Business broker and real estate services in the Los Angeles and Orange County areas. 10 years experience with great negotiating skills. To sell a business or buy a business in the LA or Orange County Areas phone Jack and his team at 562-787-4989 Cell / Text.

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

William F. Ziprick, Attorney: Legal Services For Buyers And Sellers

Through creative problem solving, attention to detail, accessibility, & understanding that unnecessary delay is often a deal killer, I work closely with my clients and other professionals to consistently achieve a high rate of closings. Office: 909-255-8353, Cell: 509-951-7230.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Tips On Successfully Buying A Gas Station Business That Pumps Out Profits

Buyers who think they want to buy a gas station don't realize that finding the station to own in this industry & determining its fair price pose more complex problems than buying most types of small businesses. Peter Siegel, MBA (gas station financing expert at BizBen) at 925-785-3118 explains.

Successful Liquor Store Buyer: Shares Liquor Store Buying Tips With BizBen

Buying a liquor store can present some major challenges to buyers - a recent client on the BizBen ProBuy Program relates to Peter Siegel, MBA what the major challenges may be when searching for and buying a California liquor store business. Read what other Liquor Store advisors have to say as well!

Mailbox And Postal Store Buying Tips For Business Buyers - Top Expert Ideas

Potential Postal buyers who want to buy a mailbox, packaging, shipping store serving individuals as well as small businesses can benefit from several profit centers as these services offer a variety of services. It's a good idea to know some facts about this type of business before making an offer.

How To Buy A Vending Route: Multiple Tips For Vending Route Business Buyers

Some business buyers think they might like to buy a vending business but have heard negative things about the industry & aren't aware of important facts about this type of business. Here are some guidelines by Peter Siegel, MBA (Vending Route Financing Expert) at 925-785-3118 to help buyers.

When Buying A Liquor Store - Is Location Important? Many Items Factor In

Does Location matter when purchasing a liquor store? Some experts believe that while it is still important, location is not as important in the liquor store as it is with other businesses. Peter Siegel, MBA (BizBen ProBuy Program & Liquor Store Financing Expert) at 925-785-3118 discusses this topic.

Selling A Gas Station Successfully: Tips For Gas Station Owners And Sellers

Gas station owners often make the process of selling their business longer and more expensive than it needs to be. By accomplishing several important steps before even looking for potential buyers, owners will be able sell their businesses in a fraction of the time it would take them normally.

Restaurant And Fast Food Franchises - Successful Tips From Franchise Buyers

Restaurant franchise offerings are among the most popular of the business types potential business buyers seek. What many would-be owners don't realize is that there are specific tips for buying fast food or restaurant franchises that don't necessarily apply to independent restaurants for sale.

3 Tips for Increasing Profitability When Buying A California Liquor Store

When on your search to buy a liquor store business, consider additional ways that you may use the location to generate additional revenue streams. Peter Siegel, MBA (Liquor Store Purchase Financing, ProBuy/ProSell BizBen Programs) at 925-785-3118 discusses buying California liquor store strategies.


Escrow Services From Helen Yoo New Century Escrow
Redwood Escrow Bulk Sale Services
Michael Brewer, ABC License Consultant
Escrow Services Diane Boudreau-Tschetter
Facebook
Twitter
Linkedin
Vlogs and Podcasts
New Postings Reports On BizBen Sign Up
California Educational Events Buying And Selling Businesses
Business For Sale California Stats
Instant Email Alerts On BizBen
BizBen Blogs And Articles
BizBen ProSell Program


BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved



Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Tips On Successfully Buying A Gas Station Business That Pumps Out Profit...
Read More News
How To Buy A Vending Route: Multiple Tips For Vending Route Business Buy...
Read More News