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
Business Due Diligence or a Seller Warranty? Which is Better…
/in Business Buying, Due Diligence/by Willard MichlinThe 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
Business Valuation Pitfalls: What is the True Worth of a Business?
/in Business Buying/by Willard MichlinI am often asked how can we determine the true worth of a business.
The first step to this process requires determining the actual profit of a business in the current market conditions. The second step is to create a value for the current income stream assuming it continues into the future or you may want to look at the profit potential of a business not based on the current business activities.
What is Seller’s Discretionary Income?
Read more
Restaurant Business Ownership Advice: Is It a Good Idea to Buy a Restaurant Business In This Economy?
/in Specialties/by Willard MichlinHard to believe, but restaurants, fast food and other types of food manufacturing or food distribution businesses compose fifty percent of all small businesses sold. Fifty percent! This means a lot of you buyers are buying restaurants.
Business Buying Pitfalls: Should You Sign a Personal Guarantee on a Lease?
/in Business Buying/by Willard MichlinWhen you buy a business it usually comes with a lease already in place.
If the lease is not coming due shortly the seller tells you to assume and qualify for the lease. They think this gets them off the hook, but it doesn’t. The seller then becomes a guarantor of the lease in case the buyer defaults. Only if a new lease is written is the seller fully off the hook and the buyer can negotiate new terms and conditions with the landlord.
It is in the buyer’s best interest to negotiate a new lease with terms and conditions acceptable to the buyer.
Read more to find out more about leases and buying a business. Read more
Expert Business Advice: On Avoiding Worker’s Compensation Insurance
/in Business Buying/by Willard MichlinThe underground economy is the illegal way to avoid paying payroll taxes and workers compensation insurance.
Of course when and if you get caught, the penalties are quite high. If you do the bulk of your work yourself and only hire low paid staff that has low payroll expenses, you can compete with the underground economy.
Read more
Buying a Smog Shop
/in Articles/by Willard MichlinBuying 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
Fast Food Franchise “A Disaster in This Market”
/in Business Buying/by Willard MichlinThis 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
/in Business Buying/by Willard MichlinPurchasing 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
Business Due Diligence or a Seller Warranty? Which is Better…
/in Due Diligence/by Willard MichlinThe 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. I assure you a seller can have a lot of good reasons for not wanting to give it — and some are totally legitimate.
So, when are you justified in asking?
There are several conditions to look for. To find out what conditions to look for Read more
Finding Out the Seller’s Motivation
/in Articles, Business Buying, Newsletters/by Willard MichlinWhat Motivates a Business Seller?
When working with buyers as a business broker and a CPA doing due diligence, the buyers universally ask one question. “Why is the seller getting out?
This is a good question but the question I ask is, “How do you know if the seller is telling you the truth?” Read more