What should I check before buying a candle business?

Many people ask whether a candle business is a good one to own. That is a question about your plans and your skills, and only you and your advisers can weigh it. What a buyer can do is check what is actually being handed over. A candle business is built on recipes, suppliers, records and relationships. This list shows what to ask for before you sign anything.

Formulas, scents and who owns them

Ask for the written wax blends, wick choices and scent recipes, and whether any were developed by someone other than the seller. A contract maker, a former employee or a supplier may have a claim. Ask whether scent names, labels and photographs belong to the business. Your lawyer should confirm that what the seller says is for sale is the seller’s to transfer.

Suppliers and stock

List the suppliers of wax, fragrance oils, wicks, jars and packaging. Ask which could be replaced easily and which supply something unusual. Count the stock yourself or with an adviser, and ask how old the finished goods and raw materials are. Fragrance and wax can change with age, so stored materials need a sensible look. The inventory checking guide helps.

Burn tests, batch records and complaints

• Burn-test notes for each product and any changes made after problems.
• Batch records that link a finished candle to its materials.
• Customer complaints, returns and how they were resolved.
• Any insurance claim, and the current policy and its conditions.

Wholesale accounts and the owner’s role

Ask who buys wholesale, how long each account has ordered, and whether the relationship is with the business or with the owner personally. Ask what the owner does each week and what you would need to learn. If the owner offers training, ask for the arrangement in writing. Your accountant can review the financial statements, who can explain what moves the margins in a candle business.