Food, Retail & Hospitality · Buyer guide
Buying a Furniture & Home Furnishings Store business
Published · Reviewed by The Diligence Standard Team · Updated
a Furniture & Home Furnishings Store 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
Inventory turns, gross margin, special-order backlog, delivery logistics, financing and showroom lease determine value.
Risks to test
- Aged inventory
- Customer deposits/backlog obligations
- Showroom lease
- Supplier concentration
- Delivery fleet
- Owner buying taste
Evidence to request and reconcile
- Inventory aging
- POS/category margins
- Customer deposits/backlog
- Vendor terms
- Lease
- Delivery fleet
Decision questions
- What inventory is truly saleable?
- What deposits create future delivery obligations?
- Which vendors are critical?
- What does delivery cost?
- Can merchandising continue without owner?