What should I look for in a workwear store’s embroidery and customization equipment?
Look at each machine in use. Check its age, maintenance history, breakdowns and how busy it is, and ask who operates it. Also find out whether the equipment is owned outright, financed or leased, and what it would cost to replace.
Embroidery and printing equipment can be the heart of a workwear shop, and a source of trouble. Ask to watch a job from start to finish, and see how long it takes, how much waste there is, and how often the operator stops to fix something. A machine that runs well in a demonstration but needs constant attention may not be as useful as it looks.
Request service records and invoices for repairs. Ask who services the machines and how fast they respond. Find out what parts are hard to get and whether the model is still supported. Consider whether the software and files used to create designs come with the sale, and who holds the customer artwork.
Ask about ownership. Is anything financed or leased? What is owed? Ask your lawyer to check for liens and for what happens to equipment agreements in a sale. Finally, ask who runs the equipment. If a single person knows how to set it up, you may be buying a skill as well as a machine. An equipment appraiser can offer an independent view. Ask how much of the shop’s income depends on this work.
Key takeaways
- Watch the machines work and ask for service records and breakdown history.
- Confirm what is owned, financed or leased, and have your lawyer check for claims on it.
- Find out who operates the equipment and whether designs and files transfer.
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Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
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