Your Company is capable of making money.
Very few business owners think they are making all the income their business is capable of making. In fact this is overwhelmingly the number one complaint that business advisors hear.
Occasionally a CPA will hear a complaint from their client that he is making so much money the government is getting rich off of him. CPAs and tax attorneys love this kind of client because this is what they are trained for. Save the client taxes. Unfortunately many are not experienced in finding out WHY their client is not making enough money.
Have you ever heard the phrase? “If the problem is what you thought it was, it would not be a problem.” What exactly does that mean? It means that asking the right questions will get you the right answers. Let’s look this over very carefully.
For example, let’s take a situation where the profits are down, and the sales are stable. What do you do first? Find out what changed? If you do not know what changed, you cannot put it back the way it was. Conversely if you know what changed you can use your experience to solve the problem and return to affluence.
The normal solution for a business, that is not making as much money as they were before, is to go to their banker and say, “I need money.” But this is not the solution. Find the answers by clicking on this link Read more…
About the Author:
Willard Michlin is a Certified Public Accountant (CPA #106752), Certified Fraud Examiner (CFE) and a Business Broker. He offers assistance in the key areas involved in the buying of a business; due diligence, review of financial reports and business valuation. He is an experienced, honest and trustworthy consultant. His goal is to watch your back. His due diligence clients are located all over the world. He has published many articles and is in demand as a public speaker. See other articles and information about his services at: www.evaluateabusiness.com.
You can call Willard and he will always answer your questions. He can be contacted at his Orange County, California
office by calling 805-428-2063.
Do You Know Why Your Business is Not Making Enough Money?
/in Articles/by Willard MichlinYour Company is capable of making money.
Occasionally a CPA will hear a complaint from their client that he is making so much money the government is getting rich off of him. CPAs and tax attorneys love this kind of client because this is what they are trained for. Save the client taxes. Unfortunately many are not experienced in finding out WHY their client is not making enough money.
Have you ever heard the phrase? “If the problem is what you thought it was, it would not be a problem.” What exactly does that mean? It means that asking the right questions will get you the right answers. Let’s look this over very carefully.
For example, let’s take a situation where the profits are down, and the sales are stable. What do you do first? Find out what changed? If you do not know what changed, you cannot put it back the way it was. Conversely if you know what changed you can use your experience to solve the problem and return to affluence.
The normal solution for a business, that is not making as much money as they were before, is to go to their banker and say, “I need money.” But this is not the solution. Find the answers by clicking on this link Read more…
About the Author:
Willard Michlin is a Certified Public Accountant (CPA #106752), Certified Fraud Examiner (CFE) and a Business Broker. He offers assistance in the key areas involved in the buying of a business; due diligence, review of financial reports and business valuation. He is an experienced, honest and trustworthy consultant. His goal is to watch your back. His due diligence clients are located all over the world. He has published many articles and is in demand as a public speaker. See other articles and information about his services at: www.evaluateabusiness.com.
You can call Willard and he will always answer your questions. He can be contacted at his Orange County, California
office by calling 805-428-2063.
Find Your Passion In Your Work When Buying A Business
/in Business Buying, Due Diligence/by Willard MichlinThe most common comments I hear from business buyers are “What is a good business to buy?
I am open to any business that can make me money” They also bring up this question whenever they find any company that looks interesting. “Is this a good industry to be in?” What they are not getting is that every industry is a great industry for the few doing well and a terrible industry for the rest of the world. I would say that 50% of all business owners just barely get by, 30% do average, and 20% of the business owners make a profit that they are proud of. It has nothing to do with what industry it is but everything to do with the management of the company.
So if it is all about the management, how do you know if you are going to be good top management material?
Well there are several things.
Let’s review some of those traits. Read more
Why Don’t More People Buy Businesses?
/in Articles, Business Audit Tips, Business Buying, Business Due Diligence Horror Stories, Newsletters/by Willard MichlinWhy More People Do not buy a business?
Introduction
You may not believe what they say yourself, but if you have been in the business of buying businesses for a long time you’ve heard someone repeat this time worn statement.
“One in 14 buyers actually buys a business.”
The business brokerage industry throws around this number all the time.
This “1 in 14” number (or only 7% ) is based on statistics gathered from some old-time brokers. They must have actually kept track of how many buyers called their firms versus how many deals they closed. We can’t know how well they tracked this info, or where this data originated from. But, thankfully, the actual number is not the important part. For the sake of solving the problem, we just need to see that it’s low, and really could be better.
Here’s why that number stays so low…
Read more
Get Rich While Going Green and Saving Your Dollars
/in Business Buying/by Willard MichlinGoing Green helps the earth and saves you money.
So how do we do that? This is a very interesting subject. The “Green Environmentalists” are designing and building new low energy use buildings. Because of the three year draught, they are also recycling water and reducing energy use.
Congress passed a law subsidizing solar generated electricity.
You can also buy electricity from independent utility companies who are selling electricity at a discount. Let us not forget solar water heaters.
Read more
Why We Need Due Diligence Just to Sign a Purchase Contract
/in Business Due Diligence Horror Stories, Due Diligence/by Willard MichlinHenry is an educated businessman. He has real estate license but wanted to find a method of earning extra income. He has been looking at various businesses. He was now interested in a Laundromat. He collected the necessary preliminary information and sent it to me, along with a signed accepted offer, to review and discuss. Prior to the Laundromat, Henry and I had reviewed two other businesses together that he passed on.
When I had reviewed what he had sent me, I gave him my insight into the coin laundry industry and pointed out things he should be concerned about. Read more
Due Diligence Pitfalls: What are the biggest barriers to doing Due Diligence?
/in Due Diligence/by Willard MichlinWhen buying a business one has to see what is not on the financial documents provided by the seller.
To do that you need to graduate the Sherlock Holmes College of Observation. Mr. Holmes was famous for seeing small clues that appeared to others to be meaningless, but in truth, were the keys to solving the case.
In the 20 years of doing business due diligence I have concluded it is not about the information that is given to me but the information that is withheld or forgotten to be provided.
Read more
Why Should Inventory and Accounts Receivable be Part of the Purchase Price?
/in Business Buying/by Willard MichlinWhy should Inventory and Accounts Receivable be Part of the Purchase Price?
The standard procedure when a broker takes a listing, on a small main street business, can be with or without the inventory being included in the listing price. Including it actually presents a more honest picture, to the buyer, of what is required to buy and run the business. The reason it gives a better picture, with the inventory included, to a buyer, is because when the buyer looks at the net cash flow figure (SDE) and then compares it with the asking price, the buyer sees that it a high multiple. Let’s take an example. Net cash flow is $100,000. The price without inventory is $200,000 and with inventory is $300,000. The price is 2 x without inventory but 3 x with inventory. This might make the asking price look too high but in fact that is the real multiple.
Read the full article to find out why this is so important.
Read more
Purchasing A Business? Find The Right One For YOU!
/in Business Buying, Consultants, Due Diligence/by Willard MichlinAre you interested in purchasing an existing business? What type of business will you excel in owning? Start here with our help and save yourself stress, time and money!
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How to start your own business & be successful
/in Business Buying/by Willard MichlinDo you want to start a business and be successful?
In the movie and play South Pacific there is a song called “Happy Talking.” The words to that song go something like this (feel free to sing along if you know the tune):
“Happy talk, keep talkin’ happy talk,
Talk about things you’d like to do.
You got to have a dream,
If you don’t have a dream,
How you gonna have a dream come true?”
Surveys of successful people have shown that the love of the work has been more important than the money.
Interestingly, that usually equates into success in the work of love, which is then followed by financial success. To find out more on how to succeed. Read more
Is Buying An Online Business The Way To Go After COVID-19 Is History?
/in Articles, Specialties/by Willard MichlinLast week I received a phone call from Dan in New York City. He and his wife decided it was time to get out of Dodge and move to Southern New Jersey, where the air is cleaner. Dan had located a brick and mortar school that had some online presence. Since the COVID-19 shut down they quickly converted to 100% on-line classes. But now the business owners want to sell Read more