How do you explore profit margins of previously existing businesses?

 

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How do you explore profit margins of previously existing businesses?

Hi everyone. With the future of my current job up in the air with the pandemic going on, I’ve decided to brainstorm opening a business that I feel it recession/pandemic proof: A liquor store/craft beer distributor.

I know the up front capital investment would be huge. I’ve had a lot of difficulty establishing what the general profit margins for pre-existing businesses like the one I am envisioning are. Google searches turn vague and outdated information which lots of times, doesn’t correlate with the state I am living in (NY).

In writing my business plan, I’d like to establish a general idea for the profitability of my business. Are there any good resources I could use?

How do you explore profit margins of previously existing businesses?

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4 Replies to “How do you explore profit margins of previously existing businesses?”

  1. Find a business broker in your area. Websites like bizbuysell will have plenty of them. Most businesses that are serious about selling will show you their financials and tax return.

    Another resource would be business valuation experts. Primarily CPAs that don’t do taxes or audits, but value companies usually for situations that arise out of litigation (divorce, partnership breakup, fraud, bankruptcy, etc). Check your local CPA society for recommendations.

  2. A liquor store is very different than a craft beer distributor. The hurdles needed for the liquor store I believe are cash to buy the permit and set up the site, the lease and inventory. The profit margin would be based, of course, on these costs and the anticipated sales as revenue. As someone mentioned, business brokers and data aggregators keep this under paywall. But with some digging, you can find probably both business types and samples of P&Ls online. For example, All of these businesses for sale list some sort of numbers you can look at. [Liqour stores for sale]
    (https://www.bizbuysell.com/colorado/liquor-stores-for-sale/)

    edit: the sentence structure and Colorado listings are just random I pulled up

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