How do I find out if a custom baling business has a few big clients carrying it?

Begin with the invoices. Ask for a list of customers for each of the last several seasons, showing the acres or bales done and the amount billed. Sort it from largest to smallest and see how much of the work comes from the top few names. A long tail of small jobs is a different business from three farms that book most of the season.

Then ask about the relationships. How did the big accounts begin? Are they on handshake terms or written agreements? Do they use the baler year after year, or did one appear recently? Ask whether any client could do the work themselves or hire someone else easily.

Ask the seller for permission to speak with the major clients. Their answer on whether they will keep booking is the best evidence you will find. Also ask whether the seller’s own personal ties hold those accounts, since personal ties do not always transfer. Finally, ask what share of work is repeat and how many new customers came in lately. Your accountant can help you read the revenue patterns. Ask what a normal season of bookings looks like by early spring, since late bookings can hide how thin the base is.

Key takeaways

• Sort several seasons of invoices from largest customer down.
• Find out which accounts are written and which are handshake.
• Speak with major clients about staying after the sale.