How can I tell whether an agritourism business for sale is profitable?
Ask for results by season and weather rather than one yearly total. Separate admissions, food and farm-stand sales from crop sales, put a real cost on family labour, and test whether visitors come for the owner’s name. Have your accountant read the statements with you.
Corn mazes, pumpkin patches and many farm days earn most of their income in a few weekends. A wet Saturday in the busiest stretch can change a year. So a single annual profit number tells you little. To see how the business really performs, you need the records broken down, and you need a plain account of who does the work.
Read results by season and weather
Ask for several seasons, month by month and, for the busiest period, week by week. Ask the seller to mark the years with poor weather, a late crop or a closure, and what happened to visitor numbers. If every year looks strong, ask what the owner did to protect the key weekends. If results swing widely, ask how the owner covered the slow years.
Split the income streams
A farm that welcomes visitors earns in different ways. Admissions, food, the farm stand, events and crop sales behave differently and carry different costs. Ask for each stream separately so you can see which ones carry the business. Our page on event venue profitability looks at a similar question for a venue.
Count the family’s labour
Many agritourism farms run on unpaid family work. Ask who works, how many hours and in which roles, then ask what it would cost to hire for the same work. Your accountant can help you restate the results with that cost included, so you can see what the business earns once the work is paid for.
Do visitors come for the owner?
Some places are loved because of the people who run them. Ask how visitors hear about the farm, how many return, and whether the owner is the face of the event. A handover plan and a period of support from the seller can help.
Related reading
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Buying
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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 CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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