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

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 […]

Protect Yourself From A Bad Purchase Agreement

It is important to protect yourself from forfeiting your deposit when you sign a purchase contract. This would seem to be a very obvious statement. Except, what is not obvious is that so few people know how to do that. The result of inexperience is that too many people lose their purchase deposit. The deposit checks vary from $5,000 to $50,000 or even more. Read more

Restaurant Business Ownership Advice: Is It a Good Idea to Buy a Restaurant Business In This Economy?

  Hard 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.

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

Finding Out the Seller’s Motivation

What 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

Is it Ethical to Sell a Successful Family Business When You Have Children and Grandchildren?

I have been a business broker for 25 years, and after selling hundreds of businesses, I have some very strong feeling about successful business owners selling their businesses.

Story #1: Abe Michlin (my father) and his recycling business.

Dad died in November 2016 at 96 years old.  His primary goal for the since 1980 was to turn the business over to one of the children or grandchildren. Which person that would be changed every few years. When I was in college, I thought it would be me. But by the time I was 27 years old, and my mother died, it became clear that I had bigger dreams then my dad. I left to become a buyer of foreclosure real estate, and make my first small fortune.  My brother-in-law, Jerry came into the business along with Shana, my new step-sister. Jerry ran sales and production. Shana ran the office and handled anything dad needed to be done. Dad ran the business but on a part time basis. His new wife wanted dad to smell the roses and see that there was more to life then business. Dad loved business and regretted every retiring at all, even when he physically and mentally was forced to.

From 1980 to 2005 he planned his exit strategy.

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Business Buying – How Much Does An Owner Have To Work

Many business buyers have the idea that they will buy a small business to create a second income. The idea is to put in 10 hours a week, or less doing the management functions such as, posting the quick books, making sure the employment forms are filled out correctly and are complete. Lastly they know they have to Read more

Case Study: Laundromat

This is a true story of one of my assignments regarding a Laundromat in Los Angeles County. This story has turned out to be one of the most fascinating tales I have ever heard.

I was not brought in before the purchase but 3 years later when problems arose to be an expert witness. Read more

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When I was in college, 1965-1969, we talked about the $200,000 billion underground economy. Now 50 years later it must be 10 times that big. A high percentage of small businesses I look at have some cash payroll or some undeclared cash sales. Because of the competitiveness of the market, those that are not paying some or all of the required payroll taxes or sales taxes can quote better prices then those that are paying union wages and benefits or are paying all of the required payroll taxes. This is fraud in business. Read more

Who Can I Trust?

When Making a Business Acquisition, Whom Can You Trust?

When a business broker tries to play both sides of the buying and selling process, it can mean trouble for the buyer, seller, or both. Don’t get had by a “dual agent” broker.

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