How do I tell what an antique store owner actually takes home?
Ask the seller and your accountant to reconcile the statements with the owner’s real activity: how stock was bought and carried, how cash and show sales were recorded, what consigned goods were paid out, and how many unpaid hours went into buying trips. The gap between those is what the owner takes home.
An antique store’s statements rarely show the owner’s real income at a glance. Stock may have been bought with personal funds, sales may arrive in cash or at shows, and the owner may spend many unpaid days travelling to buy. Before you rely on any number, build the picture from the records with your accountant. These are the areas to ask about.
How stock is carried
Ask how inventory is recorded and when it was last counted. Stock bought long ago may be carried at its cost, which can differ a lot from what it would sell for today. Some pieces may belong to the owner personally and not to the business. Ask for a list of what is included, with the date it was bought, and have it checked by someone who knows the category.
Cash, shows and online sales
Many antique sales happen at shows, by cash, or through a marketplace. Ask how each channel is recorded and whether the deposits match. If the seller cannot show the sales, you cannot rely on them. Your accountant can tell you what to ask for and how to test it. Do not accept a verbal figure for sales that are not in the records.
Consignment and the owner’s time
If the store sells goods on consignment, find out what is owed to consignors at closing and how splits are paid. The owner’s time matters too. Buying trips, cleaning, research and photography can fill many hours that no statement counts. Think about what you would pay someone to do that work, and what that leaves.
Questions to put to the seller
- What did you take out of the business last year, in any form?
- Which stock is yours and which belongs to consignors?
- How many hours a week do you spend buying and sourcing?
- Which sales were cash, and where were they deposited?
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are financial statements?
- 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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