I was talking with a business owner the other day, and they bought a deli business in Rocklin, California without digging into the bookkeeping as they should. They later found that the last owner was paying wages under the table, and this means that with the true cost of labor to run the business they will not make the kind of profit they are expecting. The sad truth now is that the wife is now having to go out and get an evening job, just to help with the loan they took out to buy the sandwich shop.
Many times I see new business owners who are over anxious to buy a business, because they see BIG profits on the financials they are being shown. The wrong kinds of surprises start to show up when you don’t get a second opinion on the bookkeeping, like the people I shared about above. Just know you may not find all of the skeletons in the closet, if you don’t check!
Let me know if you need a hand with payroll or bookkeeping. You can reach me, Todd Lay, by calling (800)482-5339. Trying to keep up with all this on your own is tough enough, and most of all it does not make you any money. Understanding how to read the reports and know what to change is what will make you money.