What should I ask about a caterer’s rental inventory of linens and chafing dishes?
Ask who owns every item, what shape it is in, and how much of it is replaced each season. Linens stain and fray, chafing dishes dent and lose fuel holders, and some stock may be leased or borrowed. A count that looks large can hide a lot of worn-out pieces.
Ask for a full inventory list by category, then walk the storage area with it in hand. Check a sample of linens for stains, thin patches and fading, and look at how chafing dishes close, whether lids fit and whether frames wobble. A tidy shelf can still hold items nobody would put in front of a client.
Separate owned stock from anything leased, borrowed or still being paid off. If a rental company supplies part of the equipment for big events, ask whether that supplier will deal with you on the same terms. Equipment financed by the seller may carry a lien that needs to be cleared at closing, and your lawyer can confirm that.
Find out how the business replaces and tracks things. Ask about losses after events, how damaged goods are written off, and whether the seller keeps a log of what goes out and comes back. Poor tracking often means the true count is lower than the list claims. Last, ask what the busiest season demands. Stock that is enough for a regular week may fall short on a peak weekend, and a gap there is a cost you will meet soon after you take over.
Key takeaways
- Match the written inventory against what is actually on the shelves, item by item.
- Separate owned, leased and financed stock before agreeing what is included.
- Ask how losses and damage after events are recorded and replaced.
Related reading
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Selling
Due diligence
- Expert answerHow do I verify inventory and equipment before buying a business?
- Expert answerWhat if due diligence shows the inventory is actually obsolete?
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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 is inventory
- 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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