Case History: Comprehensive
Inventory Appraisal & Analysis

Wine & Liquor:
Package Store

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Not only will a comprehensive inventory count and appraisal help secure a small business loan, but it also helps ensure that a new owner is starting with an accurate inventory.

Situation

Seated due north of Atlanta, Georgia, in a rural-"esque" community sits is a young but established package store recognized as a leader for its unique selection of wine, liquor, beer, cordials, and mixers. Package Store serves a customer base in their concentrated area, but due to their selection of hard-to-find items, the location also appeals to customers outside of a typical package store's radius. Due to the demands from operating multiple businesses, the original business owner decided to put Package Store up for sale. With the community primed for explosive growth, new prospective buyers jumped at the opportunity to become first-time business owners through a business that served the entire socio-economic spectrum and a low industry default rate. However, to secure a loan for the business a comprehensive inventory and appraisal of all of the merchandise present was required by the lender.

Objective

Through a local Small Business Development Center (SBDC), Fortis was recommended to the buyer to perform a physical count of all the inventory present at Package Store and assign an appraisal value to the inventory. Also, the new buyer intended to use the results of the inventory count to update a new Point-of-Sale (POS) system at the location. In reconciling inventory and its performance to the business, Fortis considered the following factors as essential to the report: review of available unaudited financial statements, including P&L and Balance Sheet, and other operating data; review of the composition of the current inventory and product pricing and sales; review of previous sales reports, including Year-to-Date and previous Annual reports; review of relevant comparative industry information, economic and demographic data. Fortis also performed interviews and discussions with management during store visits that involved staff that handles inventory, the seller of the business, and the buyer of the business.

Results         

Fortis developed a comprehensive inventory audit and asset appraisal report that included the inventory value, comprehensive inventory indicators and optimal performance metrics, business indicators, industry dynamics, company highlights, company history, photos, and inventory details. 

Fortis completed the appraisal in a timely manner to ensure that the closing date would be met with the final results reported as close as possible to the closing date to ensure accuracy.

The buyer used the final report to successfully secure the loan and take possession of the business. 

Approach Strategy

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