What should I check before buying a kitchen and bathroom renovation company?
Check the showroom and design staff, where leads come from and what online reviews say, supplier accounts with cabinet and countertop makers, client deposits on ordered materials, which trades are subcontracted, and the history of callbacks. Ask which of these would stay if the owner left.
A kitchen and bathroom specialist differs from a general renovator. Ask how a lead becomes a signed project. Your job is to find out how much of that process belongs to the business and how much to the owner. The broader renovation contractor guide covers the general case.
Showroom and design staff
Ask who designs the projects and who clients actually meet. If the designer is the owner, you are buying their eye. If there are employed designers, ask about their pay, tenure and any agreement they have signed. Check whether the showroom is leased, and what the lease allows when ownership changes.
Leads and reviews
Ask where enquiries come from: search, referrals, home shows, designers or builders. Read the online reviews yourself, including the poor ones and how the company answered them. Ask who controls the website, the review profiles and the advertising accounts, and make sure they pass to you.
Suppliers, deposits and trades
Cabinet and countertop suppliers may extend credit or special terms to this owner. Ask which accounts exist and whether a new owner would keep them. Clients usually pay deposits on materials that are ordered months before install, so find out what has been ordered, who has paid and where that money sits. Also ask which trades are employees and which are subcontractors, and how loyal they are.
Callbacks
Request the log of callbacks and complaints, and how each was resolved. A pattern in one trade or one product is more useful to you than a single bad job. Ask your accountant to read the financials with you and your lawyer to review the agreement.
Related reading
10 pages on the same subject, grouped by topic.
Due diligence
Buying
- GuideBuying a residential renovation contractor in Canada
- Expert answerHow do I check a kitchen cabinet shop’s reliance on builders before buying?
- Expert answerWhat should I check before buying a custom closet company?
- Expert answerHow do I tell what a construction company owner actually takes home?
- Expert answerHow do I read a plumbing company’s mix of service, renovation and new-construction work?
Legal
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Canadian Home Builders' AssociationIndustryCanadian Home Builders' Association
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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