How do I find out how weather swings affect a pressure washing company’s calendar?
Look at job dates and revenue across several seasons, and compare busy and slow periods with the weather that year. Ask how the company reschedules, whether customers cancel and how the owner covers costs in a poor stretch. The records show how exposed the calendar really is.
Ask for monthly job counts and revenue across as many years as the seller can supply. Plot them side by side. A business that earns steadily has a flatter line than one that bursts in a few good weeks. Notice any year that looked very different and ask what happened. Do this for at least several seasons, not just the latest one.
Then dig into the weather itself. Ask how many jobs were postponed because of rain or cold, and whether they were completed later or lost. Postponed work that is later recovered is far less worrying than work that disappears. Ask whether customers book ahead or call on the day, since people who book ahead give a calendar more shape.
Look at the cash side. Fixed costs such as vehicles, insurance and wages continue when crews cannot work. Check the cash flow statements for slow months and ask how the owner got through them. Your accountant can help you study them. Finally, ask whether the company has any indoor, winter or contract work that smooths the calendar, and how willing customers are to book ahead. Ask customers too, because they often remember how the company handled a long wet spell.
Key takeaways
- Compare several seasons of monthly jobs and revenue.
- Find out whether postponed jobs are recovered or lost.
- Check how fixed costs are covered when crews cannot work.
- Look for work that smooths the calendar, such as contract jobs.
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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 is Cash Flow
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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