Home – New Forums Starting your journey Business for sale will not provide paperwork. What to do?

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  • #976390
    jackwalsh20
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    I am thinking of purchasing a business – from the outside (and the few figures the Real Estate mentions) it seems like a good business – however they are not providing any paperwork (such as Balance Sheets and Profit and Loss Statements). This seems very suspicious to me, however there is a possibility (albeit slight) that the owners are doing it for a non-suspicious reason. What should I do?

    #1081910
    Shaukat Adam Khalid
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    then buy an option where you get to work with them for 6 months and then decided to buy.

    if they can see the value, u will build up a relationship where they will open up to u. and if u dont buy, the premium is a tax write off and a profit to them.

    the other option is to move on. do u know that 60%+ of businesses are ready to sell?

    if u want to take it to the next level, ask the business broker to review to check with similar types of businesses that were sold 12mths+. most are over the “my product is so great, it will sell itself” delusion.

    #1082110
    Shaukat Adam Khalid
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    then buy an option where you get to work with them for 6 months and then decided to buy.

    if they can see the value, u will build up a relationship where they will open up to u. and if u dont buy, the premium is a tax write off and a profit to them.

    the other option is to move on. do u know that 60%+ of businesses are ready to sell?

    if u want to take it to the next level, ask the business broker to review to check with similar types of businesses that were sold 12mths+. most are over the “my product is so great, it will sell itself” delusion.

    #1081911
    Cat – GLC
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    If you are legitimately looking to purchase the business and have conveyed to them that you are a serious buyer they should provide the paperwork from the past few years.

    Otherwise how did they come up with the selling price of the business if they have nothing to back them up? I would be asking for their financials before going any further, but that is just my opinion.

    Cat

    #1082111
    Cat – GLC
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    If you are legitimately looking to purchase the business and have conveyed to them that you are a serious buyer they should provide the paperwork from the past few years.

    Otherwise how did they come up with the selling price of the business if they have nothing to back them up? I would be asking for their financials before going any further, but that is just my opinion.

    Cat

    #1081912
    jackwalsh20
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    hymstrategies, post: 101707 wrote:
    then buy an option where you get to work with them for 6 months and then decided to buy.

    The problem is, the reason they state for not showing the paperwork is that they are ‘in a rush to sell’ and as a result of ‘don’t want the complexities that providing paperwork creates’.

    #1082112
    jackwalsh20
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    hymstrategies, post: 101707 wrote:
    then buy an option where you get to work with them for 6 months and then decided to buy.

    The problem is, the reason they state for not showing the paperwork is that they are ‘in a rush to sell’ and as a result of ‘don’t want the complexities that providing paperwork creates’.

    #1081913
    SamanthaE
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    jackwalsh20, post: 101709 wrote:
    The problem is, the reason they state for not showing the paperwork is that they are ‘in a rush to sell’ and as a result of ‘don’t want the complexities that providing paperwork creates’.

    I think that that in itself is a bit of a red flag.

    You need to know that you are getting good value as well as knowing how long it will take you to repay the funds or make a substantial profit to make a living. How can you plan anything without knowing this information which is gained from the financial paperwork.

    I wouldn’t do it if it was me, but that’s just my opinion.

    Good Luck with it all.

    #1082113
    SamanthaE
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    jackwalsh20, post: 101709 wrote:
    The problem is, the reason they state for not showing the paperwork is that they are ‘in a rush to sell’ and as a result of ‘don’t want the complexities that providing paperwork creates’.

    I think that that in itself is a bit of a red flag.

    You need to know that you are getting good value as well as knowing how long it will take you to repay the funds or make a substantial profit to make a living. How can you plan anything without knowing this information which is gained from the financial paperwork.

    I wouldn’t do it if it was me, but that’s just my opinion.

    Good Luck with it all.

    #1081914
    Shaukat Adam Khalid
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    deal of the decade comes every week. how long have you been looking to buy a business? how many have you carefully seen?

    If it’s less than 100, you’re gambling, not investing. Might as well spend the money on a holiday..or give it to me. :D

    #1082114
    Shaukat Adam Khalid
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    deal of the decade comes every week. how long have you been looking to buy a business? how many have you carefully seen?

    If it’s less than 100, you’re gambling, not investing. Might as well spend the money on a holiday..or give it to me. :D

    #1081915
    JohnSheppard
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    Run a million miles from them IMO…

    It’s like buying a car with no service records….the price goes down like 20%….gotta sell in a hurry? Then the price goes down another 20%….car looks dodgy? Down goes the price another 50%….

    Those three things are what you are thinking about buying…you should pay the market rate…

    What they want is not your problem and irrelevant to the market value of the business. When was the last time you cared what the guy flipping your burger wanted? What s/he wants doesn’t alter what you or other people are willing to pay for the burger…

    They can’t provide paperwork, less people will want to buy it….less demand…lower price…
    They want to sell in a hurry, less people want to but it….less demand…lower price…

    If you don’t want to run…offer them about 5% of their asking value…

    They might take it when no one else will pay any more…

    #1082115
    JohnSheppard
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    Run a million miles from them IMO…

    It’s like buying a car with no service records….the price goes down like 20%….gotta sell in a hurry? Then the price goes down another 20%….car looks dodgy? Down goes the price another 50%….

    Those three things are what you are thinking about buying…you should pay the market rate…

    What they want is not your problem and irrelevant to the market value of the business. When was the last time you cared what the guy flipping your burger wanted? What s/he wants doesn’t alter what you or other people are willing to pay for the burger…

    They can’t provide paperwork, less people will want to buy it….less demand…lower price…
    They want to sell in a hurry, less people want to but it….less demand…lower price…

    If you don’t want to run…offer them about 5% of their asking value…

    They might take it when no one else will pay any more…

    #1081916
    UberCable
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    jackwalsh20, post: 101700 wrote:
    I am thinking of purchasing a business – from the outside (and the few figures the Real Estate mentions) it seems like a good business – however they are not providing any paperwork (such as Balance Sheets and Profit and Loss Statements). This seems very suspicious to me, however there is a possibility (albeit slight) that the owners are doing it for a non-suspicious reason. What should I do?

    Run the other way.

    #1082116
    UberCable
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    jackwalsh20, post: 101700 wrote:
    I am thinking of purchasing a business – from the outside (and the few figures the Real Estate mentions) it seems like a good business – however they are not providing any paperwork (such as Balance Sheets and Profit and Loss Statements). This seems very suspicious to me, however there is a possibility (albeit slight) that the owners are doing it for a non-suspicious reason. What should I do?

    Run the other way.

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