Manufacturing & Industrial · Buyer guide
Buying a Cabinet & Millwork Shop business
Published · Reviewed by The Diligence Standard Team · Updated
a Cabinet & Millwork Shop can look attractive on a summary P&L while the operating details underneath it change the cash flow, transferability and capital a buyer will actually own. Diligence should connect the reported earnings to the business-specific drivers that create them.
How the business works
Backlog, design/estimating, production labor, material purchasing, installation and equipment capacity drive value.
Risks to test
- Owner design/estimating
- Skilled labor
- Underpriced backlog
- Equipment CapEx
- Builder concentration
- Installation claims
Evidence to request and reconcile
- Job costing
- Backlog
- Staff payroll
- Equipment
- Builder/customer revenue
- Rework
Decision questions
- Who designs/estimates?
- Is backlog profitable?
- What equipment needs replacement?
- How concentrated are builders?
- What rework/warranty exists?