How to Stand Out in a Crowd
Buying a winery is significantly different from buying a new home or piece of property on many levels. First, it’s a business, so potential buyers will want your financial history along with your projections.
Second, your reputation and status among wine enthusiasts is an important component of your valuation. You can’t assume that prospective buyers have this kind of information at their fingertips.
Third, the people who make, bottle and market your wine are vital parts of the equation. You won’t find that kind of information in an MLS database.
At California Winery Brokers, we spend many hours creating what we call your Deal Book. The Deal Book is a 35-50 page (plus addendums, which can amount to hundreds of pages) document designed to sell prospective buyers and investors on your winery.
The buyers, investors, and Private Equity Groups who acquire wineries are busy. They may look at hundreds of wineries all around the world and make a go/no go decision in minutes. Another winery owner looking to acquire an established business like yours is also busy running his day-to-day operations. As intermediaries, it’s our job to both broaden and narrow the field to include all qualified buyers.
Generally, you as the person selling a business are interested in:
- Obtaining the highest purchase price
- Transferring the business to a quality buyer whom you can trust to safeguard, maintain and even grow the business that you have worked years to build
- Minimizing the income taxes resulting from the transaction
- Funding your retirement or new business ventures
The typical investor or person buying a business wants to:
- Purchase a quality business
- Have the actual business purchased be consistent with what the buyer believed he or she was purchasing
- Obtain a fair price for the business purchased
- Protect his or her assets against the potential failure of the business after the completion of the purchase
- Minimize the cash investment
- Leverage his skills, prior experience, or existing business resources
Every buyer has specific objectives in mind. Our priorities are to make your business look attractive to the buyer, and subsequently quickly and easily close the sale.
Nobody ever mentioned a Deal Book before, and I thought that it was exactly what we needed to find the best buyer. ~ Frank del Greco
To accomplish this goal, we create a Deal Book.
Summary of the Marketing Process
A major portion of the Deal Book comes from information and data you supply us during interviews and through Email or mail. The rest comes from our knowledge of your industry and research we conduct behind the scenes.
We’ll provide you with a questionnaire and a list of other information or items we need. After we complete our initial discussions and gather all the relevant information, we get to work on the Deal Book.
Think of it as a 40+ page brochure that contains all the information a potential buyer will need to say yes or no and to express interest in proceeding to the next step. While we’re creating the Deal Book, we’re also constructing our pre-vetted list of potential buyers based on criteria you provide and our contacts and experience.
Then, we actively market to the pre-vetted list of buyers, sending the confidential Deal Book and related appendices (financial data, equipment lists, vendor lists, etc.) to only those buyers who are clearly qualified, who have an expressed interest in your business, and who have signed non-disclosure agreements.
The number of buyers who receive the deal book could be as low at one (they do not know how special they are) or as many as fifty – every deal is unique. The process of deciding to whom we disclose information is taken very seriously and we work closely with the Seller to control the release of information.
Contents of a Typical Deal Book
- History Timeline. This includes your winery history and revenue history, as well as any other historical information that might attract a buyer.
- Company Overview. We tell them just enough about your winery to pique their interest and let them know within minutes if yours is a business that will be of interest to them.
- Business Structure & Ownership. They’ll need to know things like who owns the business, how the shares are divided, the legal structure of the business, etc. We might also include in this section your reason for selling if we feel it’s relevant. That’s often the first question we’re asked.
- Organization. Here we’ll include things like a description of your day-to-day operations, resumes of key employees, and reference to additional documents, such as employee benefits or employee handbooks. This is where we get to brag about the people who can make the new owner a big success.
- Products. This section is critical, but sometimes no more important than the organization. Some buyers may be more interested in your people than your products. In this section, we’ll include cover shots, photos, and images. We’ll display your awards, wine ratings, and detailed descriptions of your wines. We’ll talk about wines you’ve made, as well as what’s coming.
- Research & Development. Some buyers may be interested in knowing how well your business is set for the future. Are you planning any new wines? Are you expanding your own grape production, or trying new varietals or blends?
- Customers and Sales. How are your wines sold and distributed? In what quantities? Do you have existing contracts that must be honored? Your buyer will want to know both how you’re selling and distributing today, as well as opportunities for the future.
- Industry Overview. We’ll research and include things like an industry outlook and any trends we see the wine industry. Are there any regional or other advantages you might have because of your location?
- Competition Overview. Who are your major competitors? What are your strengths or advantages, and what are your weaknesses or disadvantages?
- Growth Opportunities. We’ll examine your existing sales and marketing practices, and then identify specific areas of growth you and we see for the buyer. We’ll lay out the growth strategies as we see them, including any new markets or geographical growth. This section is typically the second thing Buyers look at after profitability, and we go to great lengths on how to grow the business. The more growth potential within the market, the higher the price. Growth potential is a big value driver.
- Vendors. Your relationships with your vendors is an important ingredient to your success, as it will be to your successor. Who are your key vendors? What agreements do you have in place with them?
- Facilities. We’ll provide images and photos to show potential buyers what they’ll be getting.
- Equipment list. In the Deal Book, we’ll list the major equipment, then include the entire list in an appendix if necessary. The buyer will want to know all about your equipment list – age, model, depreciation schedule, etc.
- Financials. We’ll include a Financial recast. We will prepare a separate Financial Appendix available for buyers at a later stage.
Finally, we’ll include a separate “Non-Binding Proposal” page where the buyer can express an interest in bidding on your business.
Contact us today to sell a winery. California wineries for sale and selling wineries in California.