How can I tell if a granite countertop shop is profitable before buying?
Read the shop’s profit job by job, not only in the yearly statements. Ask for costing by job type, how much of each slab becomes finished stone, what remakes and callbacks cost, how builder and homeowner work are split, and how much of the owner’s own labour is unpaid. Then have your accountant confirm the picture.
A granite countertop shop can look busy and still earn little. Stone is costly, the machines are heavy, and one bad job can erase the margin on several good ones. The yearly statements give a total, but they hide which work pays. Before you rely on any profit figure, ask how the shop knows what each kind of job earns, and whether the seller’s records can show it.
Ask for job costing by job type
Kitchens, vanities, bar tops and commercial runs do not cost the same to make. Ask the seller to walk you through a few recent jobs of each type, from the quote to the final invoice, including slab cost, labour hours, consumables and installation. If the shop only tracks revenue, you will have to build the picture yourself, and your accountant can help you read the financial statements alongside the job files. Our countertop fabrication checklist covers the wider review.
Look at slab yield and waste
A slab is paid for whole, but only part of it becomes a countertop. Ask how the shop lays out cuts, what happens to offcuts, and whether leftover pieces are sold or reused for smaller jobs. A shop that plans its layouts well keeps more of each slab. Ask also who is responsible when a slab cracks, and how often that happens.
Count remakes and callbacks as a cost
A remade piece costs stone, machine time and a second trip. Ask how remakes are recorded, whether they are charged to the original job, and what the main causes are: measuring errors, damage in transport or installer mistakes. Ask whether these costs show up in the books.
Check who pays, and when
Builder work and retail homeowner work behave differently. Builders and homeowners may pay on different schedules, and some pay deposits up front. Ask how customers split between the two, how long invoices usually stay open, and whether any single builder accounts for much of the work.
- Does the owner template, fabricate or install, and is that labour on the payroll?
- Would a hired manager cost more than the owner now takes?
- Is the equipment old enough that replacement should be planned for?
The owner’s unpaid labour is the last piece. If the owner does the templating or the selling, add what replacing that person would cost before you call the shop profitable. Equipment condition matters too, so ask for an independent look at the machines before you commit. If you are still searching, see how to find a stone fabrication business.
Related reading
13 pages on the same subject, grouped by topic.
Buying
- Expert answerHow do I find a countertop or stone fabrication business for sale?
- Expert answerWhat should I check before buying a countertop fabrication business?
- Expert answerHow do I keep key employees after I buy a business?
- Expert answerHow can I tell if a jewellery store is profitable before I buy it?
- Expert answerHow can I tell if a water store is profitable before I buy it?
- Expert answerHow can I tell if an online store for sale is really profitable?
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- Expert answerWhat does an old CNC mill’s maintenance log tell me about a machine shop?
Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are financial statements?
- 02Business Development Bank of CanadaGovernmentWhat is the operating profit margin?
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 04Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
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