Business Valuation Blog | Understanding Buying / Selling a Company

How is a Bottling Facility Valuation Different Than Other Business' Valuation Process?

Posted by Business Valuation Specialists LLC on Feb 3, 2020 8:00:00 AM

bottling facility business appraisal

When you're considering having your business valued, it's natural to wonder how the process differs from other industries. A bottling facility valuation has a number of differences compared to other industries. Understanding how your facility is different and how those differences impact your company's value can make a big difference in understanding how to leverage that value to your business' benefit. Here's a quick look to help you understand the process and how you can use the knowledge you gain in business valuation to your bottling facility's advantage.

How is a Bottling Facility Valuation Different Than Other Business' Valuation Process?

Let's start by looking at the daily operations of your bottling facility. You need to keep the product cold until, through and after the bottling process is complete. This is a vital part of your company's success, by ensuring the quality of your clients' product and their success. The product must be successfully bottled, ensuring that minimal amounts of the product are lost during processing to breakage, leakage and spillage. Throughout the process, the product must be kept moving efficiently through your facility so that you can keep your business running profitably.

This bottling process means that you have a great deal of business value in your company's equipment, including refrigeration, filtration, conveyance, filling, labeling and transport. The reputation of your business is also a solid part of your company's value, as your prosperity is tied up in the success of your customer's products. This particular combination of equipment and reputation is a unique aspect of bottling facilities, and must be taken into consideration by an experienced business valuation specialist when determining the value of a company.

Another area where a bottling facility is different than other industries is in the organization of the business. Many bottling facilities are franchises of major drink manufacturers, such as soda, beer, juice or similar drinks, while other bottling facilities are independent, taking on a range of new or small-scale drink companies' products to help them get off of the ground. Some facilities are huge, covering hundreds of thousands of square feet, while others are much smaller, covering a bare minimum of space to better accommodate their smaller-scale clients. A business appraiser will need to be able to take this wide range of business sizes and organizations into account and adjust their calculations of value in this process.

At the same time, business and income security must be taken into account when calculating income. Franchises that are part of a major drink business have a more secure level of income, ensuring a stronger resale value and more demand in the market. Independent businesses have a number of benefits as well, such as more flexibility in a changing economy.

A bottling facility valuation provides you with a wide range of information that you can use to grow your business, fight inaccurate tax assessments, accurately document income for insurance purposes or support your side of negotiations during the sale or purchase of a company. However, it's of vital importance that you use the services of an independent, accredited business valuation specialist. The independent nature of this type of appraiser ensures that the valuation report you receive will be accurate and free of any outside influence, calculated using methodologies that have been tested time and again in a wide range of situations.

Topics: Bottling Facility Business Valuation