How can I tell whether a detailing business is profitable before I buy it?

Ask what is left for the owner after costs and a wage for their own hours. The work is hands-on, much of it is paid by card, e-transfer or cash, and the best jobs are often done by the seller personally. A general earnings check is a good start, as our page on checking that a business actually makes money explains. Detailing adds a few questions of its own.

Match the payments to the paperwork

Ask for the booking calendar, invoices and bank statements for the same period, and see whether they agree. Detailing is paid in several ways, including e-transfer and cash, so deposits should line up with completed jobs. If the seller says some sales were never recorded, your accountant can tell you what a lender and the books will and will not accept.

Look at profit by type of job

A wash, a paint correction and a coating or film install use different amounts of time, product and skill. Ask the seller which services leave the most after materials and labour, and which are mainly there to fill the calendar. A business that earns its keep on a few specialized services is exposed if the person who performs them leaves.

Separate the owner’s labour from the profit

If the seller works on the floor all week, part of the reported profit is really wages for that work. Decide what it would cost to hire someone to do the same jobs, then see what remains. Ask your accountant to help restate the statements that way before you compare them with anything else.

Check dealer, fleet and seasonal work

• Find out how much of the work comes from a few dealerships or fleets, and whether those accounts will stay after a sale.
• Compare busy and slow months, since weather and the selling season move bookings.
• Ask how many repeat customers there are and how new customers find the business.