How do I judge weather dependence in an outdoor adventure outfitter’s bookings?
Look at past bookings alongside the weather: how many trips were cancelled, moved or refunded, and how the business handled them. Then ask about its cancellation policy, its bad-weather options and its cash cushion. The aim is to see how steady the income is when the forecast turns.
Ask for booking records over several seasons, showing the trip date, the revenue and whether the trip ran, moved or was refunded. Compare good and poor seasons. Check whether cancellations cluster on certain weekends or trip types, and whether the business lost money on trips it had already staffed and prepared. Ask whether the business has ever had to close for an extended spell, and how it paid staff and suppliers during it.
Next, review the policies. What does the booking terms page say about weather, who decides to cancel, and how often do customers accept a credit instead of a refund? Ask about indoor or shorter alternatives, and whether those actually earn money or only keep customers happy. Check how far ahead customers book, and how often early bookings are cancelled when the forecast changes.
Finally, read the cash flow. Outdoor businesses often earn in a short window and pay costs year-round. Ask how the seller has managed lean stretches, whether insurance covers any losses, and what reserves exist. Your accountant can help you judge how a poor season would affect your repayments and plans. A buyer who plans for a poor season in advance is in a better position than one who hopes the weather will be kind.
Key takeaways
- Compare booking records against cancellations, credits and refunds.
- Read the weather policy and ask what alternatives exist.
- Study cash flow through slow periods and ask about reserves.
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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 is Cash Flow
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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