Harvest to Pour: Business of Beverages

Bach Business Brokers - Navigating business sales in the spirits industry with Jeff Bach.

Episode Summary

Jeff Bach, founder of Bach Business Brokers, a company specializing in business brokerage services within the spirits, beer, and wine industries. With over 14 years of brokerage experience and more than 30 years as an entrepreneur, Jeff shares his insights on business sales, especially in the alcohol sector. They discuss the unique aspects of valuing and selling businesses in the spirits industry, the importance of strategic partnerships, and the critical steps that business owners should take when preparing to exit. Jeff emphasizes the need for business owners to plan ahead and be ready for a sale years in advance to maximize their business's value. He also sheds light on the specific challenges faced by craft distillers and brewers and the ways they can navigate their growth and acquisition opportunities.

Episode Notes

Show Notes:

Introduction to Jeff Bach: Jeff discusses his background as a serial entrepreneur and his transition into business brokerage, focusing on the spirits, beer, and wine industries.
Why Jeff Chose Business Brokerage: He shares his passion for being involved in deals and helping others through the process, stemming from his previous experience in business ownership.
Explaining the Role of a Business Broker: Jeff describes how business brokers, like real estate agents for businesses, help sellers find buyers and facilitate negotiations and closings.
Viability of a Business for Sale: Jeff talks about assessing whether a business is viable for sale and the importance of matching seller expectations with market reality.
Key Differences in Alcohol Business Valuation: He explains how alcohol businesses, especially those producing aged products like whiskey, have unique valuation factors such as aging inventory and intangible assets like formulas and expertise.
Challenges in Selling Alcohol-Related Businesses: Jeff highlights the difficulties in selling alcohol businesses, such as valuing products like whiskey and the impact of a brewmaster or distiller leaving.
Preparing for a Business Sale: He advises business owners to plan ahead for an exit strategy, ideally starting 3-5 years before they intend to sell to maximize their business’s value.
The Importance of Staging a Business for Sale: Jeff compares staging a business for sale to real estate, emphasizing the importance of cleaning up financials and operations to make the business attractive to buyers.
Strategic Partnerships and Collaborations: He discusses how craft distillers and brewers may seek strategic partners or investors to grow their business, often more than seeking an outright sale.
Real-World Examples: Jeff shares the story of a brewery in Defiance, Missouri, where the buyers purchased a bar-restaurant for its brewing equipment, showcasing the variety of motivations in alcohol business sales.
Conclusion and Final Advice: Jeff stresses the importance of starting the sale preparation process early, understanding valuation, and consulting with a business broker to successfully navigate the sale process.

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