How do I check a sign shop’s repeat customers before buying?
Go through the invoice history and group jobs by customer to see who comes back and how often. Look at how much work comes from a few accounts, and what kinds of jobs recur, such as installs, replacements and maintenance. Repeat work shows the shop earns trust, not just one-off sales.
Ask for a customer-level view of the invoices over several years of trading. Sorting by customer shows who has returned, how often and for what kind of work. Compare it with the shop’s own description of its customers. If they differ, ask why.
Look at concentration. If a few accounts, such as a developer, a franchise group or a property manager, supply much of the work, find out whether their contracts are written and how the relationship is managed. Ask who at the shop deals with them and whether that person will stay.
Check the type of work. Signs that need replacement, upkeep or seasonal updates create natural repeat business, while a single large install does not. Ask about work in progress and what the shop has quoted but not yet delivered. Ask about the shop’s reputation. Reviews, referrals and complaint history reveal why customers return. Your accountant can help you separate regular customers from one-off sales in the revenue figures. Remember that quiet customers may be happy ones, and that some reorder only every few years. Ask the seller to explain the gaps, and ask a couple of longtime customers why they keep coming back. Their answers often show what the shop does that others do not.
Key takeaways
- Group invoices by customer to see who actually returns.
- Check how much work depends on a few accounts.
- Separate recurring work from one-off installs.
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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 financial statements?
- 03Business Development Bank of CanadaGovernmentMajor pitfalls to avoid when negotiating a purchase agreement
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