How do I check a landscape supply yard’s gravel, soil and mulch stock counts?
Ask how the seller measures each pile, then measure a sample yourself or hire someone independent to do it. Bulk piles shrink, mix and settle, so a number on paper is only a claim until someone checks it. Verify before closing.
Gravel, soil and mulch are sold by volume, but piles are irregular. Ask how stock is counted, how often and by whom. Compare the last count with sales and purchase records to see whether the stock levels make sense for the season. Take dated photographs of each pile during your visit so you have something to compare with at closing.
Walk the yard and look at the piles. Check whether products are separated or mixed, whether mulch has started to break down, and whether soil is clean or full of debris. Some material may be old, unsaleable or contaminated, and the seller’s count may include it.
Ask whether a stock count will be done close to closing, with both sides present, and how any difference will be settled. Decide ahead of time whether stock is included in the purchase or paid for separately, and put that in the agreement your lawyer prepares. Look also at where the material comes from and how reliably it is delivered, because a full yard in autumn can be empty by spring. Your accountant can advise how stock appears in the books. Ask also about material set aside for customers who have already paid, since that stock is not really available to you.
Key takeaways
- Find out how piles are measured, and measure a sample yourself.
- Look for mixed, aged or unsaleable material hiding in the count.
- Agree a joint stock count near closing and how differences are settled.
Related reading
12 pages on the same subject, grouped by topic.
Buying
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- Expert answerWhat should I check before buying a landscape supply yard?
- Expert answerHow do I find a gravel pit or aggregate business for sale in Canada?
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Selling
Due diligence
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?
- 03Business Development Bank of CanadaGovernmentWhat is inventory
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