How do I judge a deli’s reliance on a few big lunch accounts?

Start with the customer breakdown. Ask the seller for a list of lunch accounts, such as offices, job sites and catering orders, with what each one buys over several months. Look at how concentrated the list is. If one or two customers carry most of the catering sales, the deli carries real risk, since their staffing, moves or budgets can change quickly.

Then examine the relationship. Is there a written agreement, or only a standing order and a phone call? Who handles the account, and would that person stay? Ask how long each customer has been buying, how they pay, and whether payment is on time. The accounts receivable report shows overdue balances, which can quietly point to a customer that is unhappy or stretched.

Finally, ask the seller to arrange an introduction, if they are willing, and ask each key account what they value: speed, price, quality or the person. Compare the account sales with walk-in sales to see how the deli would look without them. Your accountant can help you read the numbers and consider what happens if one customer leaves. Note any account that orders only because of a personal friendship with you.

Key takeaways

• Get sales by customer and see how much sits with the biggest few.
• Check for written agreements and look at how promptly each account pays.
• Meet the key accounts, with permission, before you decide.