How can I tell if a scaffolding business is actually profitable?

A scaffolding firm’s statements can look healthy while the yard quietly empties. Revenue comes from labour and from rental days, and the two behave differently. Instead of asking whether the business is profitable in general, ask what each kind of work actually earns, and where the money leaks. Your accountant can help you read the answers, and this page is a list of questions, not a method for valuing anything.

Split the work into its three parts

Ask for results by job, separated into erecting, dismantling and rental-day charges. Some jobs earn well on labour and poorly on rental, or the reverse. Ask whether the company prices each part on its own or bundles them, and whether the pricing has changed. Check whether jobs with long travel or hard access earned what the quote assumed.

Look for unbilled and missing stock

Ask how the company tracks stock standing on sites past the hire period, and whether rental is billed for that time. Ask what has been written off for lost or damaged components, and when the yard was last counted. Compare the asset list, the yard and the invoices, and ask about any gaps. They are worth raising with the seller directly.

Check labour, owner time and change orders

Compare labour hours and travel per job with what was quoted. Ask whether the owner works on site or in the office without a wage, since a buyer may have to pay for that labour. Review change orders and extras: some are billed promptly, others are absorbed. Read the contracts to see who bears the cost of delays. A change of control clause may also affect the best accounts.