Which three years do buyers want?
The last three fiscal years plus a current interim. A trophy December without the two years behind it is a brochure.
Buyers buy a trend, not a single December. Three years of P&Ls and returns, weekly sales that reconcile, and a recast bridge are the file. A CIM that opens with a trophy year and a story is a brochure. Grocery Store Business Broker — HedgeStone Business Advisors, led by Jason Taken — builds the folder before anyone outside counsel hears you are selling. Print the SDE worksheet and mark the seller playbook. Then book a confidential intro when you want that folder on your store.
The valuation hub is the method: recast SDE times a defendable multiple, plus inventory at cost. BizBuySell’s grocery and supermarket sold sample printed a 3.38 average earnings multiple in 2025 and a 1.60–3.15 interquartile range for 2021–2025. Those are national listing-site figures, not a reason to skip the third year. How a sale works is the sequence this package sits in front of.
Buyers buy a trend, not a December
The last three fiscal years plus a current interim is the ask. Year one shows the base. Year two shows whether it was luck. Year three shows whether it is still true. An interim that is four quiet weeks in January is not a year. An interim that is the last twelve months against the prior twelve is a conversation.
A remodel year stays in the file. Document the one-time: invoices, downtime, the compressor, the parking-lot job. Add-backs that you can paper are add-backs. A year you drop because it looks ugly is a red flag. Recasting a grocery P&L is the worksheet. This page is the stack you hand someone after NDA.
A family or manager sale still needs this package. Soft language creates hard lawsuits. Selling to family or an employee does not waive three years. Multi-store sales need a shared recast or they unravel store by store. Selling multiple locations is that calendar.
FMI’s 2.1 percent average net profit for food retailers in 2025 is a food-retailer net sample. It explains why a buyer will not take your word for a year that only works on a spreadsheet. It is not your recast. Anatomy of a grocery P&L is the department map. Evaluating a store’s P&L is how a buyer will read what you just assembled.
Weekly sales that reconcile to the return
A weekly-sales spreadsheet without department mix is a rumor. The adult file is weekly totals, department mix, and a bridge to the annual P&L and the tax return. Those three should tell one number. A gap is mix, downtime, or fiction.
Sales-tax filings are a corroboration tool, especially where food is taxed or partially taxed. EBT deposits should reconcile to the SNAP story. USDA FNS: SNAP authorization does not transfer — that is a close issue — but the deposit history is a sales issue now. A gap between the register and the EBT trail is either mix, downtime, or fiction. Verifying sales with scan data is the buyer’s method. You should run it on yourself before they do.
The wholesaler statement is the fourth trail. Purchases should look like a store that sold what you claim. A purchase book that is half the sales story is shrink, a second set of books, or a DSD mix you never recorded. Wholesaler and banner agreements belong in the same folder. Over-advances are debt. They are not an add-back.
Scan or POS extracts beat a printed “weekly sales” PDF. If your system will export, export. If it will not, say so and offer the next-best trail — wholesaler, tax, EBT — in one memo. Do not wait for diligence week four to discover the POS vendor wants a 30-day ticket.
Unreported cash does not survive SBA 7(a). It also does not survive a serious conventional buyer. Do not build a package around a drawer that never hit the bank. Selling a store with unreported cash is honest about what that does to price and to the buyer universe. This page will not add it back for you.
Recast the add-backs before a stranger does
Recast before you argue a multiple. Owner pay, a documented one-time legal bill, and a personal auto can move SDE. Recurring shrink cannot. Related-party rent that juiced earnings will reverse on day one. Recast the store on market rent, then decide whether the dirt is a second sale. Selling with a lease versus real estate is that split.
Add-backs that repeat every year are the business. Stop calling them one-time. A “one-time” inventory adjustment that appears in all three years is shrink. A “one-time” family payroll that appears in all three years is labor you were not paying market for. The buyer will hire it. SDE versus EBITDA is the language a lender will use. Most independents live in SDE. Pretending you are a chain EBITDA file does not help.
Banner fees and program charges belong in the recast as continuing costs if the buyer will keep the fascia. Lottery commission is durable only if the contract is not personal. Confirm before you count it. WIC is a vendor file, not a sticker. Alcohol is a class, a quota, or a control-state product — NABCA lists 17 control states plus local-control pockets — and the margin on that aisle is not portable if the privilege does not move.
CAM true-ups can erase a year of “extra” SDE. Put the CAM history in the folder next to the lease. Lease diligence is the buyer’s read. You should abstract assignment, remaining term, exclusive use, and co-tenancy before outreach so the CIM is not a brochure.
Print the recast bridge: book earnings, each add-back with a source, each reverse with a source, recast SDE for each year. Recast financials is the term. A verbal list on a call is not a bridge.
What belongs in the same folder as the P&Ls
The financials are not the whole file. They are the earnings page. In the same folder:
The lease and the last twelve months of occupancy invoices. A below-market related-party rent belongs on the recast, not as a surprise. Remaining term under 24 months without options is a price cut. Put the options in writing.
The license list: SNAP, alcohol class, food permit, WIC, lottery, tobacco. USDA FNS: the SNAP permit does not transfer. The new owner files a new application. That fact belongs in the CIM and in the LOI, not in week six. What happens to SNAP when you sell is the agency page.
The wholesaler agreement, banner contract, and DSD list. A book the buyer cannot buy is not a going concern. Over-advances and personal guarantees sit on this pile.
An honest inventory guess at cost, by department. Retail tags are not cost. How inventory is counted at closing is the method you will later write into the LOI. The guess is so a buyer can stack cash to close.
Equipment list and excluded assets. The APA will schedule them. Start the schedule now. Personal vehicles, the hunting freezer, and the office computer you are taking should be named.
Payroll register and a simple org sketch. Seller hours are not free labor for the next owner. State wage tables belong in the model — minimum wage — before you quote a multiple.
What an SBA buyer will ask for next
SBA 7(a) is SBA’s primary business-loan program. Published uses include change of ownership. Published maximum is $5 million. Eligibility still wants a for-profit U.S. business that is small under SBA size rules, not an ineligible type, unable to obtain the desired credit on reasonable terms elsewhere, and creditworthy with a reasonable ability to repay. Do not invent SOP line items.
An SBA buyer will want tax returns, not just internal P&Ls. They will want the recast a CPA can defend. They will want DSCR on hired labor, not on your unpaid weeks. They will want inventory treatment in English. Seller notes often sit on standby behind the senior loan. Read SBA 7(a) for grocery and seller financing before you promise a structure you have not papered.
Unreported cash dies here. So does a return that does not match the P&L you showed in the CIM. So does a related-party rent you forgot to recast. Prepare the SBA stack even if your first buyer is cash. The cash buyer’s lender, or the next buyer, will ask.
Conventional and credit-union paper shows up when the box and the borrower are boring in a good way. Conventional and alternative financing is that path. The folder does not get shorter.
Related-party rent, multi-store, and messy books
A below-market related-party rent juiced the earnings and will reverse on day one. Recast occupancy to market. If you also want to sell the dirt, that is a second asset with a real-estate licensee in that state. Grocery with real estate is two prices.
Two entities — store in one, building in another, payroll in a third — need a consolidation memo. Buyers will not assemble your org chart for you. Intercompany charges that are not market belong on the recast.
Cash-basis versus accrual is a translation, not a moral failing. Say which one the P&Ls are. Grocery inventory and payables make cash-basis years jump. A CPA note that bridges cash to a deal-basis recast is worth more than a second adjective in the teaser.
Distressed or declining years still go in the folder. Price the lease and the stockroom, not a turnaround novel. Selling a distressed grocery is that file. Hiding year two because sales fell is how diligence becomes a re-trade.
Ethnic mix, language on the floor, and a format page that matches the box belong next to the numbers so you do not send a supermarket buyer a 4,000-square-foot Hispanic market file and call it a independent supermarket. This site does not invent CBP store counts. Pick the format essay that matches.
Hand the package, then keep the week honest
Silence is a process. Counsel and a CPA first. Then a short list of operators under NDA. Employees learn from vendors and shoppers. A vestibule sign is how shrink starts before you have a buyer. How to sell confidentially is the plan. The financial package is not a flyer.
The CIM should use this folder, not replace it. How to read a CIM is the buyer’s annotation method. If you skip the lease abstract or the recast bridge, they will call it a brochure and they will be right.
After outreach, keep the week honest. A seller who stuffs the back room, stops ordering meat, or starts running cash off-book during the process has just rewritten the file. Weekly sales should continue to match the story you sold. Surviving due diligence is the calendar once an LOI is signed.
FMI’s $1 trillion in 2025 supermarket sales describes the channel. Your three years describe the box. Quote the second.
Jason Taken and HedgeStone are not licensed business brokers in every state. Check the rule that applies to your deal. Taxes are not a percent of the headline. Taxes on selling and asset sale versus stock sale belong in week two with the CPA.
When the three years, the interim, and the bridge are in one folder, book a confidential intro. Bring last week’s sales, the lease page, and an honest list of what you do not have. Missing a year is a fact we can work. A trophy December with nothing behind it is not a file.
An illustrative recast on Preparing three years of grocery financials
Use this napkin recast on Preparing three years of grocery financials when you book the call. It is labeled illustrative. BizBuySell's 2025 grocery sold-business earnings multiple averaged 3.38, with a 2021-2025 IQR of 1.60-3.15.
| Input or output | Illustrative figure |
|---|---|
| Weekly sales (illustrative) | $228,000 |
| Annual sales | $11,856,000 |
| Recast SDE | $557,232 (4.7% of sales) |
| Inventory at cost | $741,000 (~16 turns) |
| Occupancy check | $438,672 / year (3.7% of sales) |
| Low going-concern | $1,771,879 at 1.85x SDE + inventory |
| High going-concern | $2,245,526 at 2.70x SDE + inventory |
| Sketch DSCR on a note | 1.53 |
Rent at 3.7% of sales is the occupancy check. If the real lease is higher, the SDE in this table is too generous until you recast to market rent.
Bring three years of P&Ls, weekly sales, and the lease abstract to the intro call. Jason will tell you whether this band is even in the conversation.