Byron wants to buy one location of a multi-location business—but the seller doesn’t break out financials by branch. So how can he evaluate the performance of just the location he’s interested in?
This is a common challenge in small business acquisitions, especially when the current owner hasn’t set up location-specific accounting. It may sound shocking, but many small business owners don’t track performance per branch—either because they don't know how or never felt the need. https://youtu.be/ef_vu8epGpA
So What Can Byron Do?
Here are a few options:
1. Work in the Business Before Buying
Spend time on-site. Observe daily traffic, customer behavior, and staff activity. This is one of the most reliable ways to get a “gut-level” feel for the branch’s performance.
It’s often used in industries with poor record keeping or unreported cash sales (like bars, furniture stores, or restaurants).
note: If the business is seasonal, your observations could be skewed depending on when you visit.
2. Use Indirect Clues
If you're lucky, you might be able to estimate sales from:
Customer invoices with location details
Inventory shipments
Staff schedules or payroll per location
Still, this can be tricky if no records are kept at the location level.
Protect Yourself in the Deal
When buying a business with incomplete data, deal structure becomes your main line of defense. Use performance-based terms like:
Earnouts
Seller financing tied to future results
Clawback clauses
Learn the Right Way to Buy a Business
If you’re exploring business acquisition as a way to own a profitable business (without starting from scratch), make sure you’re properly equipped.
I cover how to protect yourself and make smart buys—even with messy books—in my program at: www.BusinessBuyerAdvantage.com
Don’t forget—join my email list for early access to my latest videos and insights at DavidCBarnettList.com. You’ll even receive 7 FREE gifts when you sign up.
Talk soon,
David Barnett
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