What does a studio’s habit of ordering furniture for clients mean for a buyer’s risk?

A studio that orders furniture is doing more than giving advice. It is placing purchases in its own name, often with client money paid up front, and then waiting on suppliers to deliver. When you buy the business, those open orders usually come with it, along with whatever went wrong on them.

Ask for a schedule of every order in progress: the client, the supplier, what was deposited, what was paid onward and the promised delivery date. Compare the client deposits against what the studio actually passed to suppliers. A gap may mean the studio has been using one client’s money to cover another’s costs. Your accountant can tell you how those deposits appear in the financial statements.

Look at how returns, damaged deliveries and late shipments were handled. Ask whether the studio carries the loss or passes it to the client, and what the contracts say. Check supplier terms too: does the studio buy on credit, and would the suppliers keep those terms for a new owner? Finally, ask whether clients signed off on substitutions in writing, since disputes often start there, and whether any complaints are still open today.

Key takeaways

• Get a full schedule of open orders, deposits received and money paid to suppliers.
• Compare client deposits with supplier payments to see whether funds have been mixed.
• Ask who absorbs damage, delay and returns, and whether suppliers will keep their terms for you.