How do I check a custom baling business’s booking book and repeat clients?
Ask for the booking book from past seasons and match it to invoices and bank deposits. Repeat farm clients are the main asset here, so find out who comes back each year and who simply called once. Weather will shift dates.
Start with the book itself. Whether it is a notebook, a calendar or a spreadsheet, ask to see several seasons. Compare what was booked with what was actually baled, since weather moves the work around. Note how many clients are repeat, how many fields they book and how the order of work is set. Ask how double bookings and cancellations were handled, since a calm answer suggests the operator is organized under pressure.
Test it against the records. Pick a handful of bookings and follow each to an invoice and then to a payment. Ask if any clients pay late, and whether prices were agreed or negotiated job by job.
Next, consider who holds the relationship. If clients call the owner on a mobile phone and trust him personally, the book may not transfer easily. Ask the seller to introduce you, and find out whether clients would keep booking someone new. Finally, look at what happens in a wet season: do clients wait, cancel or switch operators? That answer shows how sticky they are. Put the key facts into your purchase agreement, with advice from your lawyer. Also ask what share of the work comes through referrals, as that shows how clients regard the service.
Key takeaways
- Compare the booking book with invoices and bank deposits.
- Count repeat clients and ask how they would react to a new owner.
- Ask what happened to bookings in a wet season.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
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