How do I assess a hardware store’s special order and lumber desk business?
Ask for sales, margin and customer lists for the lumber desk and special orders separately from the shelves. Identify the contractors who rely on it, the suppliers who fill it and any orders in progress. Then check how much of that business depends on the current owner’s personal relationships.
Special orders and lumber often carry larger tickets and more demanding customers than the aisles do. Ask the owner to separate that business in the figures. Look at who buys, how often, and whether a few contractors account for most of it. A desk that depends on a handful of accounts can change quickly if one of them moves on.
Then examine how the desk runs. Who quotes, who orders from suppliers, and how are returns, shortages and delivery handled? Ask to see open orders, deposits taken and any promised prices that have not been confirmed by suppliers. Contractors remember when quotes are honoured and when they are not.
Finally, look at the stock and yard. Ask what lumber is held for particular jobs, how old it is and how it is stored, since weather and handling can spoil material. Find out whether supplier terms or credit lines are tied to the current owner. Your accountant can help you read the ratios and margins, while your lawyer can check supplier credit arrangements. Ask the desk staff, too, which customers they would hate to lose; their answer is often more useful than any list.
Key takeaways
- Get sales and margin for the lumber desk and special orders on their own.
- Find out how many contractors account for most of that business.
- Check open orders, deposits and promised prices before you take over.
Related reading
15 pages on the same subject, grouped by topic.
Due diligence
- Expert answerHow do I check a furniture store’s customer deposits on special orders?
- Expert answerWhat should I ask about a hardware store’s buying group before purchase?
- Expert answerHow do I check a clothing store’s old stock before buying?
- Expert answerHow do I check a convenience store’s product mix before buying?
- Expert answerHow do I check a grocery store’s spoilage before buying?
- Expert answerWhat should I ask about a bridal shop’s gowns on order that have not arrived?
Buying
- Expert answerHow do nearby charity thrift stores affect a thrift store I want to buy?
- Expert answerShould I buy a lumber yard or start one?
- Expert answerHow do I learn a convenience store’s ordering routine before I take over?
- Expert answerHow do I take over a store’s supplier ordering accounts after buying it?
- Expert answerWhat happens to a retail store’s customer loyalty program when it is sold?
- Expert answerWhat happens to a store’s point-of-sale system when I buy it?
- Expert answerHow do I check a music store’s lesson program and teacher arrangements before buying?
- Expert answerHow do I check a kitchenware store’s cooking-class and demo programs?
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are financial statements?
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.