How do I check a convenience store’s seasonal sales swings before buying?

A convenience store that stays open all year can still have a busy season and a quiet one. A store on a cottage road, near a campus or beside a school will feel the calendar. So will categories that follow the weather, such as cold drinks, ice, ice cream, propane, firewood and windshield fluid. A single month of records cannot show that. A longer view can.

Ask for monthly sales by department

Request monthly sales for each department over more than one year, and put them side by side. One year alone may include a strange month, such as a road closure or a big local event. Look for which categories rise and fall and when. Ask the seller to explain each swing in plain words, then check the explanation against what you see in the financial statements.

Match sales to staffing and stock

Seasonal trade changes the work. Ask how staffing changes through the year, how early the seller orders stock for the busy months and how much cash that ties up. Ask what happens to leftover seasonal goods. Check the inventory records for items that sit too long after the season ends, since that can tie up money you would rather use elsewhere.

Plan for the slow months

The question for a buyer is whether the store can pay its rent, wages and loan payments in its quietest months. Build a month-by-month cash flow forecast with your accountant, and ask your lender how it looks at uneven sales. Also ask whether you would need a cushion in your own account for the first slow season, which may come soon after closing.

See it in more than one season

• Visit at a busy time and a quiet time, and at different hours.
• Talk to nearby businesses about when traffic changes.
• Ask what draws the busy season, and whether it could shift.
• Ask which categories carry the slow months.