How do I judge a roastery’s tasting room and retail bag sales?
Split the sales into tasting room drinks, retail bags and anything else, and see how each trends. Then watch the room: do visitors leave with a bag? Check the hours, staffing, rent and waste behind the room. If the room mostly serves as a showroom, judge it by the bags it sells.
Ask first for the sales split. Request till reports that separate drinks, food, retail bags, gift items and tasting events. A tasting room that looks busy may sell a lot of drinks but few bags, or the reverse, and each says something different about the business.
Then visit at different times: a weekday morning, a weekend afternoon and a quiet hour. See who comes in, how long they stay and whether staff suggest a bag to take home. Ask whether customers buy the same bag again, and whether the room is a place where regulars gather or one where passers-by try a cup once.
Look at what the room costs. Staff hours, rent, equipment, pastries that go stale and the owner’s own time all count. Ask what the bags would sell without the room, through wholesale or online sales. Finally, ask how much depends on one barista, one event or one season. Your accountant can help you read the margins of the room and the bags separately. Visit again a few weeks later, since one visit can mislead, and ask the seller to explain any difference between the two.
Key takeaways
- Split sales into drinks, bags and other items using till reports.
- Visit at different times and watch whether visitors buy a bag.
- Count the room’s own costs, including staff hours and the owner’s time.
- Ask what depends on one person, event or season.
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Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Statistics CanadaResearch dataMonthly retail trade sales by industry
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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