Business Evaluation Pitfalls: How to Evaluate the True Worth of a Business: Sanity Check-Buying A Business

Getting the True Value of a Business.

In the business broker community there is a review process that helps a buyer determine if a business purchase makes sense or not. This check can be done by a Fortune 500 company where everything is figured down to the penny and takes 1000 hours of research or it can be done by a small main street shop buyer who figures it out in one hour. Each item in this review process requires a decision. Read more

Business Due Diligence or a Seller Warranty? Which is Better…

The seller told the buyer “The books do not show all the money, but I guarantee you that this business will clear $10,000 a month after taxes.”

How often have you heard these words? Wouldn’t it be great if you could actually get a guarantee from a seller when buying a business? You can. But you have to ask for it, and you have to give the seller a good reason for them to give it to you.  Read more

Buying a Smog Shop

Buying a Smog Shop in California

There are millions of cars that need a smog check every year in California. So buying a smog shop can be a good investment, or it can be a bad choice. How can you tell if it is a good idea?

The State of California allows smog centers to either test the car’s emissions or to repair the car to meet the requirements. The Department of Consumer Affairs/Bureau of Automotive Repair directs vehicles that are more likely to fail, called high emitter profile, to a Test Only Center.

What is High Emitter Profile?   Read more

Upfront Fees with Business Brokers

Upfront Appraisal or Valuation Fees by Business Brokers

By Willard Michlin

January 23, 2018

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 given before the appraisal is done and paid for it is illegal. Or done as a condition of the listing it is considered an upfront fee and again is illegal.

Legitimate Fees  

As a CPA, I have found that most business books are not in a marketable form. I would therefor charge an accounting fee for putting the books in proper form. I might also charge for a CPA business evaluation. This would be usable for any business purpose in addition to selling a business.

Questionable Fees  

Read more

A Fresh Approach to Finding a Business

If you have gotten tired of looking at the same old main street businesses, I would like you to know you are not alone.

You should be prepared to look for up to two years to find the right fit. Read more

Business Buying Opportunity: Should You Buy A Distressed Business?

Everyone wants to buy a good profitable business making over $100,000 per year. The problem is there are only a limited amount of these businesses on the market. The reason for this  is everyone wants the same thing.  The results is the pricing is too high and the availability is to low.  Read more

What Business is Right for You?

The Best Way to Find the Right Business for You

The time to get advice is early in the game, not after you have signed a purchase agreement and suddenly find that you have only 10 days to complete all due diligence

Many people look for a good, profitable business of any type. That makes sense… or does it?

People such as this are not picky as to the type of business as long as it makes money. Using this technique it is very common to look at a hundred businesses and even then to find out – after hours and hours of research – that what you learned did not agree with what you were told. Such an approach is one way to go about it.   Read more

Find Your Passion In Your Work When Buying A Business

The 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

Fast Food Franchise “A Disaster in This Market”

This article was originally written in 2010 and updated in 2015. The disaster mentioned was part of the crash in the real estate, stock market and general economy in 2008.

The hardest hit industries in these economic times are real estate agents, furniture and accessory stores, clothing stores and fast food restaurants.  The first thing consumers cut out when they are on a tight budget is their expensive coffee drinks and lattes. 

The teenagers, who are a big part of the fast food consumers, have found that they also do not have money because their parents have cut their allowances or stopped them all together.  When there is money for fast food, or the family decides to eat out, they now pick the places with the cheapest prices.  Lower priced establishments get the business and the higher priced pizza places do not.     Read more

Purchasing An E-Commerce Business – 4 things You Must Know

Purchasing An E-Commerce Business – 4 things You Must Know

Today I received the Business Broker Press© release of the ten top selling businesses. At the top of the list was E-Commerce. E-Commerce refers to web based business that sells products online. This can be anything from cosmetics and clothing to automobiles and dating services to meet the future mother of your children.

Up until World War II middle America bought its products primarily from the small merchants in town. Then after the war the Big Box stores started. When the internet became popular the trend away from people making their retail purchases from “brick and mortar” store became more and more popular. Read more