How do I tell if a mower shop depends on pickup-and-delivery for its repeat work?
Ask for the customer list tagged by how each unit arrived, then see how many repeat customers use pickup and delivery. Ask what the service costs the shop in time and vehicles. If most repeat work needs the truck, the truck and its driver are part of what you are buying.
Start with the records. Ask whether work orders show if a unit was dropped off or collected. Sort the repeat customers, meaning those who came back in more than one season, by how they arrive. If the shop cannot tell, sample a few dozen work orders and ask staff to fill in the gaps.
Then look at the service itself. Who drives, how many units fit in a trip, and what does it cost in wages and fuel? Ask whether customers pay for pickup or the shop absorbs it. A service that customers value but the shop gives away may be a weak point.
Ask a few customers, if the seller will allow it, whether they would keep coming without the service. Seniors, landscapers and people with large equipment often will not. Finally, check that the vehicle, its insurance and the driver would transfer to you. Your accountant can look at the true cost of the service, and your lawyer can review any vehicle terms. Look at the seasons too. Pickup demand often peaks at the start of spring, so check whether the service is stretched then, and whether customers wait longer or go elsewhere when the truck is full.
Key takeaways
- Sort repeat customers by how their equipment reached the shop.
- Work out what the pickup service costs and who pays for it.
- Check that the truck and driver come with the business.
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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?
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