How do I check a detailing business’s chemical and polisher costs?

Start with the purchase records. Ask for supplier invoices and see which products the business buys, how often and from whom. Compare them to the services sold. If one kind of job uses a lot of product, the price for that job should reflect it. Ask the seller how much goes to waste, and whether pricing has kept pace with supplier changes. Then look at the equipment. Examine each polisher: age, motor noise, cord and pad condition, and whether replacement parts are easy to find. Ask for repair and replacement records to see how often tools fail. A kit that looks fine today may all need replacing at once, so ask how many polishers the crew needs each day and whether spares are kept. Look at how the books sort these expenses, and ask whether any shop supplies are bought personally and not through the business. Product costs rise and fall with work done, while tool costs are more fixed and arrive in lumps. Your accountant can help you separate them and judge the true margin. Finally, ask whether the business has supplier accounts, discounts or stock on hand that will transfer. Check how stock is counted and stored, since chemicals can spoil, leak or need careful handling, and ask how old stock is rotated.

Key takeaways

• Match supplier invoices to the services sold.
• Inspect each polisher and ask for repair and replacement records.
• Ask your accountant to separate product costs from equipment costs.