How can I tell what a bottle depot really earns?
Start with the container counts and match them to the payment or settlement statements the depot receives. Then separate the depot’s own handling income from money that passes through to customers, look at labour as the main cost, allow for seasonal swings, and ask what the owner’s unpaid hours are doing to the books.
A depot can look busy all day and still earn less than it seems, because much of the money moving through the door is not the depot’s to keep. A buyer who wants to understand the real earnings needs to follow the records from the counting table to the bank. This page lists the checks that matter most. It explains how to look, and it does not say what a depot is worth.
Match counts to statements
Container counts come from the depot’s own tally. The payments come from the statements the depot receives for those containers. Ask for a few months of both and see whether they line up. A gap is not proof of a problem, since timing and rejected containers explain a lot, but you should be able to hear a clear reason for each one.
Handling income versus pass-through money
Ask whether some of the cash a depot handles is pass-through money owed to the people returning containers. Ask the accountant how each kind of money is recorded, and whether the financial statements show only the depot’s own income. If revenue and pass-through money are mixed on one line, the business can look larger than it is.
Labour, seasons and one-off drives
Sorting and counting is hands-on work, so look closely at wages. Look at the staff schedule against volume. Then check the calendar: volume often swings with weather, holidays and events. A single large bottle drive can lift one month and distort the picture. Ask which months were ordinary and which were unusual.
The owner’s own hours
Many owners work the floor without drawing a wage. If the books show no pay for that work, the depot’s earnings look better than they will once you hire someone to do it. Ask how many hours the owner works and what it would take to replace them. Our guide on how to check if a business actually makes money covers the wider method.
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Due diligence
Selling
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are financial statements?
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 04Business Development Bank of CanadaGovernmentMajor pitfalls to avoid when negotiating a purchase agreement
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