How do I check which farm customers make up a feed store’s regular sales?
Ask for a full year of sales by customer account and sort it into regular, seasonal and one-off buyers. Then look at what each core customer buys, how they pay and whether they buy from the store or from the owner’s personal relationship.
Sales totals hide the story, so ask for the detail. A year of invoices or account statements grouped by customer will show how many farms buy every month, how many buy only at certain times and how many appear once. Add the type of farm if the seller knows it, because a dairy operation, a hobby farm and a horse barn buy very differently and react differently to price and delivery.
Look at the concentration. If a handful of large operations account for much of the volume, find out how long each has bought here and why. Ask whether any are considering selling their farms, switching suppliers or buying direct. Check how they pay too. Accounts that are slow or carried forward from one season to the next say something about the quality of the sales.
Last, learn who owns the relationship. Farmers often buy from a person they trust. Ask who takes their calls, who knows their needs and whether those people will stay. With the seller’s consent, speak to a few customers about service and loyalty. Your accountant can compare the customer figures with the financial statements to make sure they agree, and ask whether any customers have asked to change their terms recently.
Key takeaways
- Sort a full year of sales by customer and buying pattern.
- Check how concentrated the sales are among a few farms.
- Find out who holds each key relationship.
Related reading
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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 are financial statements?
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