How can I tell if a kayak rental depends on a single hotel or resort partner?

Begin with the numbers. Ask the seller for sales or bookings by source: walk-ups, the website, online listings and each partner. If the records do not show the source, ask how the owner knows where customers come from. A shop that cannot say may not know how exposed it is.

Next, look at the partner relationship. Is there a written agreement, or is it an understanding between two people? Check what the rental provides, such as discounts, commissions or a shared dock, and what it receives. Ask who at the partner handles the relationship and whether they know a sale is possible. Ask whether the arrangement is likely to stay with a new owner.

Then test the downside. If the partner stopped sending guests tomorrow, what would the rental lose and how fast could it replace that? Look at how much other demand there is and at the operating margin without the partner. Your accountant can help you run that scenario, and a conversation with the partner, with the seller’s consent, can be very informative. Ask the seller whether other hotels, campsites or clubs have shown interest, because a second partner makes the first less critical to the business.

Key takeaways

• Ask for bookings by source and see how much comes from each partner.
• Read the agreement, if any, and find out how it can end or change.
• Model the business without that partner and speak to them with the seller’s consent.