How can I tell if a flower shop for sale is profitable?

A seller will tell you the shop makes money. Your job is to see whether the records agree. Flower shops are unusual because sales swing sharply with the calendar, product spoils in days and the owner often does the design work for nothing. Each of those can make a statement look better than the shop really performs. Here is what to test.

Match sales to bank deposits

Florists take money several ways: the till, online orders and wire-service networks that pay on their own schedule. Ask for statements from each, and trace them into the bank account. Differences may have simple causes, such as timing or fees. Your accountant can tell you which differences matter. See also what to check before buying a florist.

Separate peak weeks from ordinary ones

Holidays and wedding season can carry much of the year. Ask for sales by week or month, and look at what an ordinary week brings in, since that pays the rent. Ask which large events were one-offs, and whether wedding bookings for the coming season are already in hand.

Count waste and delivery as costs

Unsold flowers are a real cost, and so are delivery drivers, vehicle upkeep and fuel. Ask how the owner records spoilage, and whether it appears in the statements or is simply absorbed. Compare the stock bought to the stock sold.

Be careful with add-backs

Owners sometimes add back their own wages. If the owner designs every arrangement, someone must be paid to do that after the sale. The same goes for a family member who works unpaid. Ask what the shop would cost to run with hired staff, and let your accountant review the adjustments. The seller’s financial statements are only the starting point.