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The financial records of an existing store can tell you more about that store’s history than any other piece of information. If you are considering acquiring an existing store your means of opening a dollar store don’t discount the importance of seeing those financial records. They can unlock good news and bad news about the business you are considering.

Financial records can disclose unexpected sales increases and decreases. They can raise questions that a prospective owner must have answered before an informed decision is made.

For example, what if the books show that sales dropped significantly during the holidays? That drop needs to be compared to prior year sales as well as previous month sales. Then there are questions to be answered. Why the drop? Was there inventory to support higher sales? What advertising and promotion was done? Were there traffic changes (Road work, changes in auto traffic flow, etc?) associated with the slowdown? Was there a change in tenants within the local area (Did a major anchor close or move?)? Did sales return to prior levels after the holidays? What about store personnel; were there changes? Did store hours change? The list of questions that you would want answered if you are opening a dollar store will grow from there.

On the other hand, what if the sales increased significantly during a low sales season? That increase should be verified against prior year sales as well as with other months throughout the current year. There will be many questions to be answered. Was the increase the result of a specific action taken by the current owner? Was there adequate inventory to support the increased sales, or are key item inventory levels dangerously low as a result? Was there a major tenant added? What caused sales to drop to their current levels following the increase?
Were store hours changed? Did employees have an impact? If you are opening a dollar store you will want these questions and many more answered to your satisfaction.

Be sure to thoroughly examine the financial records for any existing business that you are considering. If you are using acquisition of an existing store as the means of opening a dollar store those records can be worth their weight in gold!

To Your Dollar Store Success!

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