How can I tell if a water store is profitable before I buy it?

Ask whether a busy water store earns enough for its next owner. Income comes from several places that behave differently: customers who refill their own bottles, bottles and jugs sold off the shelf, and delivery routes to homes and offices. Costs sit in equipment that wears out and in water and power that run all day. Ask for records that let you separate each stream before you judge the total.

Split refills, bottles and delivery

Ask the seller to show sales for refills, retail bottles and jugs, and delivery in separate lines for each month. A store that relies on a few large delivery accounts carries a different risk than one with many small walk-in refills. Ask what share of delivery customers are on a regular schedule, and who drives the route.

Jug deposits and returns

If the store takes deposits on jugs, those deposits are owed back to customers until the jugs return. Ask how the store tracks them, how many jugs are out and what happens when a customer stops buying. Your accountant can tell you how deposits should show up in the books and what a buyer takes over at closing.

Filtration running costs

The treatment system is the heart of the business. Ask for the cost of filters, membranes, cleaning supplies, water and power over a full year, plus the dates of the last replacements and any service contract. A system near the end of its life is a cost you inherit. Ask who maintains it and whether the records of water testing are kept.

Match refill volume to the till

If the machines have a meter or counter, compare the volume dispensed with the refill sales the seller reports. If the two do not line up, ask why. Free refills, staff use and sampling can explain some gaps, but you want the explanation in writing. A similar check applies to other cash-heavy retail; see how to check fuel and store sales separately.