Willard Michlin

Should you knowingly overpay for a business?

I remember growing up hearing from sellers the following sales pitch for why I should pay them top dollar. "You can get fresh oats for a fair price or you can get oats that have gone through the cow for a lot cheaper." The other one I heard was "Quality r... Read >

Would you buy a home without an inspection and termite report?

Today no real estate agent will take the legal liability of having you buy a property without having a complete inspection of the building and a termite report. Why is that? Because too many buyers found out too late that the house had undisclosed problem... Read >

5 Tips For Buying Smog Repair Shops & Why You Should Care

Smog shops can be a very nice business to buy. The dangers of these businesses need to be known. Before you buy, because after you close escrow there is no turning back. Hillary Clinton says it takes a Village to raise a child. I do not know if that is tr... Read >

How Much Error Should a Buyer Expect from a Business Seller’s Financial Reports?

A business buyer who owns a business in Mexico was telling me about the corruption in government and business. This buyer had due diligence done on a gift business in Chula Vista and found that the reported profit was 15% different than reported. The bu... Read >

Using Rules of Thumb to Value a Business

Many business buyers try to use a rule of thumb to value a business. This is a valuable tool but if you actually try to purchase a business based on it, you are sure to regret it later. Last week I received a call from an experienced restaurant manager th... Read >

Being an Absentee Business Owner

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 o... Read >

How do you know if a business has good books?

I was asked by a buyer, last week, "How do you know if a business has good books?" That is a wonderful question. It reminds me of the story of the President of the US. (Not this President exclusively but all Presidents), "How do you know when the Pres... Read >

The Back Door

The battle cry of investing is "Reduce risk while at the same time increase the yield." This is the game that people with money to invest try to do everyday. In the end it is difficult if not impossible to measure risk, so decisions are made based on e... Read >

Can you make a living running a small business honestly?

When I was in college, 1965-1969, we talked about the $200,000 billion underground economy. Now 40 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 ... Read >

Should You Buy A Distressed Business?

Everyone wants to buy a good profitable business making over $100,000 per year. The difficulty with that is that there is a limited amount of those kinds of businesses out there and since everyone wants the same thing the price is high and the availabili... Read >

What is the True Worth of a Business?

I 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... Read >

What Type of Business is a Good Business to Buy?

I often hear from business buyers that they are looking for any type of good business. That approach is very much like finding a trophy wife and saying any lady will do as long as she is exciting. An exciting woman for one man can be a disaster for anoth... Read >

Should You Sign a Personal Guarantee on a Lease?

When 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 gua... Read >

Where do you find the right business to buy?

The first step in locating a business to buy is to decide what type of work you are interested in and what you are definitely not interested in. This makes the first step, going out in the world and making very complete lists of possible kinds of busines... Read >

Do you want to buy the seller’s corporation?

When you buy a seller’s corporation, few to none of the benefits accrue to you but there are a lot of negatives. Lets start with the benefits. When you buy stock in a corporation you lose tax benefits plus take the assumption of all liabilities known ... Read >