How do I check how much of a machine shop’s work is repeat parts versus one-off jobs?
Ask for a list of jobs for the past few years by customer and part number, then sort it. Parts that return on a pattern are repeat work; parts that appear once are one-offs. Check how steady the repeat orders are and whether a few customers account for most of them.
Start with data, not description. A seller who says "mostly repeat" may mean that a customer returns, not that the same part does. Ask for the job history and separate three groups: the same part ordered again, new parts from existing customers, and true one-offs from new customers.
Look at the repeat group more closely. How regular are the orders? Do they follow a schedule, or arrive in bursts? Is there a blanket order or agreement behind them, or only a habit of ordering? A habit can end with one phone call. Ask whether the customer could move the part elsewhere, and whether the shop owns the fixtures or programs needed to make it.
Then consider the one-off work. It may carry better margins, but it needs more quoting time and programming. Ask who wins it and how: by referral, by relationship or by price, and how long the quoting takes. If one person brings in most of it, that is a risk to examine. Finally, ask how repeat parts are stored and reordered. Does the shop keep stock for them? Your accountant can help you read how that stock appears in the books.
Key takeaways
- Sort job history into repeat parts, new parts from known customers and true one-offs.
- Check how regular repeat orders are and what holds the customer to the shop.
- Ask who wins one-off work and whether that skill stays with the business.
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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
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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