Should I buy a cold storage business or start one?
The choice turns on what is hard to build: an insulated building with a refrigeration plant already running, customers who trust the temperature record, and trained freezer staff. Buying brings those but also an ageing plant and old commitments. Starting fresh gives a new plant and no customers. Which fits depends on your own checks and advisers.
Starting a cold storage business from nothing takes a lot. You need a suitable building, a refrigeration plant, backup power and a first customer willing to trust you with their stock. Buying skips some of that, but it hands you someone else’s equipment and agreements. Here is how to weigh the two, with questions and no verdict.
What is hard to copy
An insulated building with a plant that is already commissioned and running is slow to replicate. So is a record of keeping product at temperature, because food and pharmaceutical customers choose a store partly on that history. Trained freezer staff matter too. Ask which of these the business you are looking at actually has.
What you inherit
An older plant may need major work soon, and a refrigeration contractor can tell you how soon. Existing contracts may carry terms you would not choose. Ask your lawyer which past losses and unresolved claims could affect you under the way the deal is structured.
What starting asks of you
- Finding or building a suitable site and getting the plant designed and installed
- Approvals and inspections that your lawyer can map out
- Winning customers who have no record of you yet
- Hiring and training staff from scratch
Our page on records storage businesses shows how buyers of other storage businesses think about this, without the refrigeration.
Questions to settle first
How long can you wait before the business earns? How much of the plant’s condition can you verify? Can you finance either path? A lender will set its own terms for each. Your accountant can compare the two on your own numbers.
Related reading
13 pages on the same subject, grouped by topic.
Buying
- Expert answerShould I buy a lumber yard or start one?
- Expert answerShould I buy an existing party rental business or start one?
- Expert answerWhat should I check before buying a records storage business?
- Expert answerWhat are the steps to buying a self-storage facility?
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- GuideBuying a refrigerated carrier in Canada
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- Expert answerWhat should I look at in a smoothie bar’s blenders and cold storage?
- Expert answerHow do I judge a deli’s cold-cut waste during a store visit?
- Expert answerWhat should I look at in a food wholesaler’s cold storage setup?
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Heating, Refrigeration and Air Conditioning Institute of Canada (HRAI)IndustryAbout | HRAI
- 04Business Development Bank of CanadaGovernmentAfter buying a business, what is the next step?
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