How do I check what a photo booth business really earns?

The earnings in a listing are the seller’s summary. To know what the business really earns, you rebuild the picture from records you can trace. That takes time but it is ordinary diligence, and a seller with good records will welcome it. Have your accountant do the work with you. The general method is in how to find a business to buy and the steps that follow it.

Start with the bank

Take the booking calendar and invoices and match them to deposits in the business bank account. Look for events that were booked but not paid, cash that never reached the account, and refunds. Ask where deposits for future events are held. A deposit for a coming event is not yet earned, and it should not be counted as if it were.

Separate what the booth earns

Ask for revenue split by event type, and by base rental, props, prints, backdrops and other add-ons. Some add-ons carry real costs and some are nearly pure margin. Find out which customers come back and which came from a single venue or planner, since that source could change after the sale.

Count what the owner does for free

Many owners work every weekend and drive their own vehicle without being paid for either. Ask what it would cost to hire attendants and a driver, and what vehicle use the business absorbs. Check also how often booths, printers and cameras are replaced, and what software subscriptions cost, since both reduce what is left.

Look across years

• Read several years of statements, not only the latest season.
• Compare the statements with the tax filings your accountant sees.
• Ask the seller to explain any year that stands out.