How do I find out which sod customers are landscapers and which are developers?
Ask for sales by customer and sort each name into landscaper, developer, retailer or homeowner. Then look at order size, timing and payment habits for each group, because they behave very differently and carry different risks. Then compare their habits.
Request a customer sales report across several seasons, with invoices behind it. Go through it name by name with the seller, who will know who does what. Mark each as a landscaper, a developer, a builder, a garden centre or a homeowner. Notice whether developers pay on completion or hold money back, since slow payers change how much cash you need.
Compare the groups. Landscapers often order often in smaller amounts through the growing season. Developers may order a large amount at once, tied to a project schedule, and can disappear when a project ends. Ask which groups have been steady and which have been lumpy.
Look at payment. Ask how quickly each group pays and whether anyone has defaulted or disputed. Check the amounts still owed at present. Finally, look at concentration and how customers found the farm. If one developer is a big share of sales, find out what projects are coming and whether the relationship is with the farm or with the owner. Speaking directly with a few customers, with permission, will tell you more than any list. Pay special attention to anyone who has recently reduced orders, and ask why. A quiet decline is often the first sign of a relationship that is cooling.
Key takeaways
- Sort every customer name into a group with the seller’s help.
- Compare order size, timing and payment habits across groups.
- Check how much depends on one developer and what projects follow.
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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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