Do You Know Why Your Business is Not Making Enough Money?

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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.

Why Don’t More People Buy Businesses?

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Why 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…

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Is Buying An Online Business The Way To Go After COVID-19 Is History?

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Last 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

High Yield Trust Deed Investments — How do they work?

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Before we can talk about Investing in Trust Deeds the reader has to know the meaning of some of the key words.

Definitions  

  • Hard Money Loan = An investor writes a check to fund the loan. It is real hard cash money that is lent to a real estate owner who is borrowing money.
  • Soft Money Loan = The seller of a piece of real estate carries back part of the purchase price as a First, Second or Third trust deed loan, on a property sold. No check is ever written to fund the loan. Therefore, there is no hard money used.
  • Loan to Value = A financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The term is commonly used by banks and building societies to represent the ratio of the first mortgage line as a percentage of the total appraised value of real estate. Example $100,000 first mtg / $250,000 value = 40% loan to value

Is a Hard Money Loan Like a Bank Loan Made on the Residence you Live in?

It works the same as when you buy a home. The bank makes a First Trust Deed loan on 80% of the sale price or appraisal value -WHICHEVER IS LESS. Read more

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Consulting “By the Minute”

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Last week, at the end of the day, I was ready to go home, but because I had to wait for my wife, I could not. Not being one to lay back in my chair, and close my eyes, I had an idea. It has been months since I acted like a business buyer and went on the web to see who in the cloud also offered CPA Due Diligence services. To my amazement I came up on the first page!

Next, I put in due diligence services and I found dozens of listings related to due diligence computers. I am not young enough to compete with computers that do due diligence and I do not understand how a computer can even do “due diligence.” Will someone tell me how a computer smells fraud?   Read more

Fire & Water Restoration Companies

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In a video I did back in 2012, I talked about looking for a business that is mandated by law or by life. The insurance business does not stop or slow down because of an economic slowdown.
It is a great industry to be connected to if you do not want to worry about economic issues. Even the pandemic of 2020 has not affected the number of insurance claims coming into my office. Homeowners file claims in good and bad times. Fires, floods, hurricanes, and tsunami do not care about economic conditions.

Overview

Let me explain my relationship to the Fire & Water Restoration industry. I have been a business broker selling main street businesses for 25+ years. I also am a CPA that does the necessary due diligence when a buyer finds a business they want to buy. I have done my share of fire and water restoration companies over the many years. Lastly, I own a landscape inspection company that does inspections for insurance adjusters on their claims received when it involves damaged landscaping, usually due to fires or floods.

In this article we are going to talk about the pluses and minuses of being in the restoration business. We will also address the reasons to buy or not buy a franchise. ServPro™ is the largest franchise in this industry. Read more

Due Diligence Case Study

Due Diligence Case Study: Poor Bookkeeping Leads to Confusion

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This is a true story of one of my due diligence assignments regarding a thief operating from within a tree trimming and landscaping company in Northern California.

Read more

Do you know why your business is not making enough money?

/in , /by

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…

Upfront Fees with Business Brokers

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Upfront Appraisal or Valuation Fees by Business Brokers I live in California, where upfront fees are illegal. The way brokers can get around this in California is to charge for an appraisal and be paid for it. After the appraisal is completed, the broker can ask for and receive a listing. If the listing is […]

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The Art of Getting Financial Records Before Signing a Letter of Intent

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How to handle brokers wanting offers before due diligence We have all heard of “The battle of the sexes”. What is not as well-known but as difficult a battle “is the one between “brokers and business buyers” regarding getting a business’s financial information. This article will discuss: 1. How to get listing brokers to release […]

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