How can I tell if a creamery or cheese maker for sale is profitable?

A dairy farm earns by producing milk. A cheese maker earns by turning milk into a product that takes weeks or months to sell. That changes what you look for. Profit on the page may look healthy while cash sits in a cave, or a good year may owe everything to one buyer. The aim here is to understand how the business earns, using the records the seller can show.

Milk cost and yield

Ask what was paid for milk, how that cost moved over the period, and how much cheese each batch produced. A drop in yield can hide behind steady sales. Ask who tracks batches and whether the logs are kept. Then compare what the statements say with the logs, as described in how do I verify a seller’s financials.

Aged stock and cash

Cheese that is aging has been paid for but not yet sold. Ask for a count of what is in the rooms, by type and age, and how it is valued on the books. Ask how often stock is written down or discarded. A large inventory can mean planned maturing or slow sales, and only the records and the maker can tell you which.

Sales mix, accounts and the owner’s hours

Separate wholesale, retail and farmers-market sales, and see which accounts matter most. If a few buyers take most of the output, ask whether they would stay after a sale. Then ask how many hours the owner works making cheese, selling and delivering, and what it would cost to replace that labour. Profit that depends on unpaid owner work is a different business from one with a paid team.

• Statements for several years, with the accountant’s notes.
• Batch and yield logs, and the aging stock count.
• Sales by channel and by account.
• Payroll, including any family members who are not paid.