Convenience Stores · Due Diligence
Convenience store due diligence means verifying the seller's claims against the real records (the tax returns, the bank statements, the inventory counts, the vendor invoices, and the licenses) before you sign. The overpricing and the misstatements hide in unverifiable inside sales, understated shrinkage, one-time vendor rebates booked as recurring, and add-backs that pump up SDE. BizScore reads all of it, flags every issue with the document it came from, and scores the deal from 0 to 100 in minutes.
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Generic due diligence misses what's specific to c-store retail. These are the convenience-store traps, and exactly how BizScore surfaces each one from the documents you upload.
A convenience store lives or dies on inventory turns and shrink: theft, spoilage, and mis-rings quietly bleed margin. Sellers understate shrinkage to make the gross margin look healthier than it runs day to day.
How BizScore catches it: BizScore checks reported margin and cost of goods against convenience-store benchmarks and flags shrink that looks implausibly low for the category mix, so you ask for the real count before you sign.
Distributors pay c-stores rebates and slotting fees (tobacco, beverage, snacks) that can be one-time, expiring, or tied to volume you may not sustain. Booked as recurring income, they inflate the profit, and they may not transfer to you at all.
How BizScore catches it: BizScore flags rebate and “other income” lines that prop up SDE, and puts “confirm the rebate agreements transfer and recur” on your checklist.
Tobacco, lottery, and (where licensed) alcohol and vape are huge revenue and huge risk. A license that won't transfer, a pending compliance violation, or a failed sting can gut the business overnight.
How BizScore catches it: BizScore flags how dependent the revenue is on age-restricted categories and puts “confirm every license transfers + check the compliance history” on your checklist. (BizScore reads documents. It can't audit how the store cards customers; that's your on-site check.)
“We do huge daily traffic” is easy to say and hard to prove. Inside (merchandise) sales should reconcile to what actually hit the bank and what the store bought from vendors. Claims that don't tie out are a red flag.
How BizScore catches it: BizScore compares reported inside sales to the bank deposits and the vendor invoices. When the story and the records disagree, it tells you where.
The most common overstatement in any cash business: reported revenue that's bigger than what actually hit the bank. Either the books are inflated, or cash is going somewhere other than the business account.
How BizScore catches it: BizScore compares the revenue on the P&L to the deposits on the bank statements. When they don't agree, it tells you by how much and where.
Price is SDE × a multiple, so every fake add-back stacked onto SDE inflates the asking price. “Add-backs” that aren't truly one-time or personal are how an overpriced deal is made to look fair.
How BizScore catches it: BizScore recomputes SDE from the bottom up (net profit plus only defensible owner add-backs) instead of taking the seller's number on faith.
What you actually get
Color-coded score, evidence-cited red flags, valuation range against the asking price, and a 45+ item checklist. Below is a redacted preview from a real Quick Scan.
BizScore Score
Caution
Worth pursuing, but several items need clarification before LOI.
What we found: The bank is showing $190k less than the P&L claims for 2024. Either the seller's P&L is overstated, or significant cash is going somewhere besides the business account.
Finding: Bank deposits sum to $620k; P&L reports $810k.
Evidence: Wells Fargo statements (Jan to Dec 2024) + Seller P&L 2024.
Next step: Request 3 years of federal tax returns before signing the LOI. If the seller declines, walk.
Valuation · SDE-based range
Industry multiple range 2.0× to 3.0× SDE. With an SDE of $200K, fair value lands $400K to $600K with $500K as the midpoint. The ask sits 25% above the top of the band. Negotiate or walk.
Honest framing, up front
Every report ends with a Limits-of-Analysis section. We surface it here too, so you know exactly where our analysis ends and where your own legwork begins.
Physical condition of equipment, the facility, or inventory. We don't visit the site.
Employee morale, retention risk, or key-person dependency. We don't interview staff.
Hidden litigation or undisclosed disputes not surfaced in the documents you provide.
Real-time market dynamics: competitive shifts, fuel-margin changes, or local economic events since the document period.
The seller's true motivation for selling beyond what they have stated.
Customer concentration, supplier relationships, or contract terms beyond what appears in financial records.
Pending regulatory changes or legislation not yet in force.
For everything on this list, you need on-site visits, your attorney, your accountant, or a direct conversation with the seller. BizScore makes the rest of the deal cheaper to evaluate so you can spend your time and money on these.
Upload the seller's P&L, tax returns, and bank statements. BizScore computes the real SDE, compares it to the asking price, and checks for every red flag on this page, each backed by the exact document it came from.
Quick Scan $49 · Full Report $199 · One-time, no subscription
It's verifying the seller's claims against the real records before you sign: matching the P&L to the tax returns and bank statements, reconciling inside sales to deposits and vendor invoices, and confirming the inventory, the rebate agreements, and the licenses. The goal is to find the overpricing and the misstatements before they become your problem.
Recompute SDE yourself, apply the market multiple for the business type, and compare that range to the asking price. Then check that the bank deposits back up the reported revenue. If the price implies a multiple above the range and the location, lease, and licenses don't justify it, you've found your negotiating room (or your exit). BizScore does all of this and scores it from 0 to 100.
Don't take the P&L on faith. Match it against the federal tax returns and the bank statements (all three should agree within a few percent) and reconcile reported inside sales against deposits and the vendor invoices. Gaps between reported revenue and actual deposits are the single most common red flag.
They're often the biggest slice of revenue and the biggest risk. BizScore flags how dependent the deal is on age-restricted sales and puts confirming that every license transfers (plus checking the compliance history) on your checklist. BizScore reads documents, so it can't audit how the store actually cards customers; that part is your on-site check.
A Quick Scan runs in about 2 to 5 minutes once you've uploaded the seller's documents. The manual version (reading the returns, recomputing SDE, reconciling inside sales) takes a CPA hours.
A Quick Scan is $49: the financial-health analysis, red flags, and a fair-price check. The Full Report is $199 and adds the 45-item due-diligence checklist, seller questions, and a state-specific legal summary. One-time, no subscription.
BizScore is built by first-time business buyers — people who watched someone close to them lose their life savings on a deal that looked clean on a spreadsheet and fell apart in the documents the seller never volunteered. That experience is why these guides exist, and why every BizScore report cites the exact document behind each finding.
Where the numbers come from: the benchmark ranges in our guides — SDE multiples, expense ratios, typical timelines — are widely-used industry rules of thumb, cross-checked against the analytical benchmarks BizScore applies inside its reports. Dollar figures such as a ~$15,000 quality-of-earnings review or a $5,000 deal attorney are representative of what buyers typically pay, not quotes; actual costs and multiples vary by deal. We review these figures periodically — last updated June 2026.
BizScore is an information service — think of it as a Carfax for a small business — not a CPA, an attorney, or financial advice. Use it to decide where to spend your professional dollars, and bring in a qualified professional before you sign anything.