In the world of liquor license transfers, establishing fair market value is crucial for both buyers and sellers to ensure transparency and trust. At License Gold, we pride ourselves on our commitment to fair market practices and strive to provide our clients with accurate and reliable valuation insights. In this blog post, we’ll explore the key factors that contribute to fair market value and how we use market research, data analytics, and supply and demand dynamics to determine real-time and accurate price ranges for liquor licenses.
Market Research
- Market research forms the foundation of our valuation process. We analyze local market trends, economic indicators, and regulatory changes to understand the dynamics of the liquor license market in each county.
- By staying informed about developments in the hospitality industry and monitoring demand for liquor licenses, we can identify emerging trends and anticipate shifts in market conditions.
Data Analytics
- Data is a powerful tool in assessing fair market value. We leverage data from several sources including the County Recorder offices to access comprehensive records of recent liquor license transactions.
- By analyzing transaction data, we can establish price ranges based on actual sales in each county. This data-driven approach ensures that our valuations are grounded in real-world market conditions.
Client Network
- Our extensive client network provides valuable insights into the liquidity of the liquor license market. We maintain relationships with buyers and sellers across various industries, allowing us to gauge demand and supply dynamics.
- By tapping into our client network, we can identify potential buyers or sellers and facilitate transactions that align with fair market value principles.
Supply and Demand Dynamics
- Supply and demand dynamics play a significant role in determining fair market value. Using real-time market data, we assess the balance between available liquor licenses and buyer demand in each county.
- Factors such as population growth, changes in consumer preferences, and shifts in regulatory policies can influence supply and demand dynamics, leading to monthly fluctuations in license prices.
Range-Based Valuation Approach
- At License Gold, we adopt a range-based valuation approach to account for variability in liquor license prices. Our valuations typically include a 5-10K range, reflecting the inherent uncertainty in the market.
- We advise clients to expect fluctuations of 5-10% outside of these ranges, providing a realistic framework for negotiating transactions and managing expectations.