How do I check a microgreens business’s restaurant and grocery accounts before buying?
Ask for a customer list with standing orders, how long each account has bought and how it was won. Look for dependence on a few buyers and for accounts tied to the owner personally. Then ask the seller, in writing, for permission to speak with key customers before closing.
A microgreens grower sells a fresh, perishable product, so check how dependent it is on a few restaurant and grocery customers. Chefs and grocers reorder because someone delivers on time and the product is consistent. When you buy, you are buying that reliability. This page covers only the customer side: how to see who buys, how firmly, and whether those accounts will stay after the owner steps back.
Start with the order records
Ask for a list of customers with the type of account, the products ordered, how often, and the dates of the first and latest orders. Standing weekly orders are more dependable than occasional ones. Compare the list with invoices and bank deposits so you know the list is complete. Your accountant can help you do that comparison.
Look for concentration
If a few restaurants or one grocery buyer take most of the output, losing one could change the business. Ask how those accounts began, whether any contract exists, and how a buyer can switch suppliers. Our page on what makes a farm business sellable explains why buyers look hard at this.
Check the other sales channels
Farmers’ market stalls, subscription boxes and online orders behave differently from wholesale accounts. Ask whether the market pitch, the subscriber list and the brand name transfer, and whether a market organizer must approve a new vendor. A stall held in the owner’s name may not pass to you automatically.
Do the customers follow the owner?
Ask who delivers, who takes calls and who the chefs text. If the relationships are personal, plan a handover period. Ask the seller to introduce you to key customers with permission, and have your lawyer write that consent and any transition help into the purchase agreement. See farm business due diligence for more.
Related reading
11 pages on the same subject, grouped by topic.
Selling
Due diligence
Buying
- GuideBuying a farm business in Canada
- Expert answerWhat should I check before buying a Christmas tree farm?
- Expert answerWhat should I check before buying a shawarma shop?
- Expert answerWhat should I do in the first months after buying a butcher shop?
- Expert answerHow do I find a Christmas tree farm for sale in Canada?
- Expert answerDo hotel and restaurant linen accounts at a dry cleaner stay after a sale?
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 CanadaGovernmentAfter buying a business, what is the next step?
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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