Welcome Back!

Now that the first month of the year is rolling, you’re back in your routine, and your 2024 goals are well on their way (or already abandoned - we don’t judge), it is time to raise a glass for the brewery industry … or maybe avoid it all together. 👀

Buckle up, because we have a lot to dive into!

INDUSTRY BREAKDOWN

The Craft Beer Boom - A Phase or Lucrative Career? 🤔

Whether you're a seasoned entrepreneur or just dipping your toes into the business brew, let's explore what's fermenting in the world of breweries 

Industry Trends

In 2008, there were only 1,574 breweries across the United States. However, as you can see in the below data from the Brewers Association, the total amount of craft breweries, microbreweries, and brewpubs has climbed to 7,346 in just a decade.  

Of the three categories of craft beer, microbreweries have contributed the most to recent production growth. Last year, they accounted for 80% of this growth, up from 60% in 2017.

Currently, 75% of Americans live within 10 miles of a brewery, and that is just the tip of the iceberg. Local breweries are popping up left and right it seems. Savvy marketing, unique offerings, and millennial preferences for local products may continue to push the craft brew trend even further.

Plus, according to Business Financing, breweries are of the oldest businesses in the world, with the first brewery opening in 1074 (that is nearly a millennium of beer-making). So perhaps a brewery is less of a fad and they are here to stay ... take that COVID-19.

The Finances 

The brewery industry has experienced significant growth over the past few years, driven by the craft beer movement and changing consumer preferences. However, like any business, owning a brewery comes with its own set of financial challenges. 

Just like how you feel when drinking copious amounts of beer, the industry has gone on a rollercoaster ride over the past decade. 🥴 

But fret not - locally brewed craft beers are the most popular amongst consumers, fueling opportunities and driving revenues for small breweries. 

One aspect of the brewery industry is the relatively high upfront costs associated with setting up a brewery. Equipment, facility costs, and licensing can contribute significantly to the initial investment. Luckily, if you are purchasing an established brewery, these are costs you don’t have to deal with! 💸

Buy or Bust? (or should we say Pour or Pass 🤪)

The brewery industry presents enticing opportunities with the craft beer boom and evolving consumer tastes. However, caution is key. Potential investors should carefully navigate the landscape, considering factors like changing regulations and market dynamics. The brew might be great, but a savvy investor knows when to tap in and when to pass on frothy risks. 🍻 

Check out these Brewery deals:

1. Exceptional Craft Brewery + Restaurant in the Okanagan, BC - $2,895,000 

2. Brewery For Sale with Real Estate on Prince Edward Island - $2,900,000

3. Turnkey Award-Winning Brewery and Pub in British Columbia - $1,395,950

Interested in a particular industry? Reply to this email with the industry you are curious about and keep your eyes peeled in upcoming issues. 👀 

DEAL REVIEW

Exceptional Restaurant and Craft Brewery

This week’s deal is a Restaurant and Craft Brewery located in the stunning Okanagan of British Columbia.

Deal Facts 🔥

Green Flags 🟢

• Revenue Growth: the business has grown from a low of $2.05M in 2021 to over $3.2M in 2023.   

• Earnings Growth: even more impressive than the revenue growth, earnings have proportionally grown from $440K to over $819K in 2023 - this is a great sign of a good business.   

• No Competition: based on the listing page, this business operates within a smaller community which limits competition. Being the ‘local watering hole’ in a small town is a good thing!  

Red Flags 🔴

• Industry Risk: our industry analysis above spoke to this best… the brewery market has been frothy at best (okay we promise that’s the last beer pun). It soars up and dives up so many times that it is hard to keep track of - making it a potential risk.

• Age of Equipment: since the business was founded in 2006, it is worth learning more about how the current owners maintained their equipment and the ‘useful life’ of the existing equipment. This is important as a buyer so you don’t get left holding the bag for a large capital expenditure (replacement costs) for major equipment.   

• Key Person Risk: many of these breweries run off the reputation of their beer - this largely falls on the shoulders of the Master Brewer. This also means that if this person leaves, you may be scrambling to find an adequate replacement. This risk can be mitigated by understanding the existing brewer’s tenure, goals for the future, and/or giving them some ownership shares (if required) to retain them!  

Watch Our Video Breakdown 

For a more in-depth analysis, check out this video deep dive of the deal by our Founder, Morgan Tate:

Possible Deal Structure: this is a pretty straightforward deal, therefore we would recommend a straightforward deal structure with a standard amount of selling financing (10-20% of the deal value) with a small holdback. 

What is a holdback? A holdback is simply holding a portion of the purchase price in trust or escrow to account for any unknown or ‘surprise’ expenses that appear post-purchase that should have been disclosed to the buyer in due diligence but were either missed or unknown by the seller.

Want to learn more about this deal? Reply to this email with a “send me more details” and we will connect you with the broker!

BROKERAGE FEATURE

Clinic Accelerator is the #1 clinic owner community with over 1000 members. With a mission to build the best clinics and leaders in the world, they help clinic owners earn more, treat less, and grow faster. Clinic Accelerator’s services include business coaching, staff training, and managed services to simplify your clinic operations.

if you have questions about the marketplace or are looking to buy/sell a clinic, book a call with Paul.

View all of Clinic Accelerator’s listings here.

SMB TWEET HIGHLIGHT

With the state of the job market currently, maybe buying yourself a job wouldn’t be the worst choice! 🤔

GOOD READS

Recommended Resources 📚

Below is a list of articles, books, and other resource we recommend for buyers or operators of small businesses!

1. Have you ever considered buying a waterpark? If you just said “yes” you’re either lying or this is a great coincidence because the crew at Acquisitions Anonymous just released a breakdown of a Georgia Waterpark for Sale - you can listen to the podcast here.  

2. This article is very technical, but required reading for anyone serious about understanding the lifeblood of any business = cash flow. Guesswork Investing has done us the curtesy of doing a deep dive on the different types of small cash flow (SDE, EBITDA, and more) in a great article here.  

3. Don’t hate us for this one - but business owner’s, you need to pay more in taxes. Why? Well, it might just make your business worth more money. Read our explanation here.