Food, Retail & Hospitality · Buyer guide
Buying a Hardware & Building Supply Store business
Published · Reviewed by The Diligence Standard Team · Updated
a Hardware & Building Supply Store can look attractive on headline earnings while asset condition, regulation, customer behavior, inventory, people or owner dependence materially change what the buyer actually owns.
How the business works
Inventory turns, contractor accounts, category margins, supplier terms, delivery capability, lease/site and inventory accuracy drive value.
Risks to test
- Aged/obsolete inventory
- Supplier concentration
- Large contractor account concentration
- Lease/site dependency
- Delivery fleet needs
- Owner purchasing knowledge
Evidence to request and reconcile
- Inventory aging/counts
- POS/category margins
- Customer account sales
- Vendor terms
- Lease
- Delivery fleet
Decision questions
- What inventory is actually saleable?
- Which categories create margin?
- How concentrated are contractor accounts?
- What supplier terms transfer?
- What fleet/site CapEx exists?