My latest encounter with a broker. Unbelievable!
A question on BizBuySell.com:
In my never ending quest to find a business on the beach, I talked to a broker about a busness that the listng read, “PROFITABLE.” Without going into great detail. I asked three times what the cash flow was. The first two times she ignored my request. The third time her response was that she did not do “projections.” Why would you even list a business if you didn’t have a cash flow number? What kind of mentally defecient person would even look at a business where the broker wouldn’t even tell you what the ownership benefit was??
Hey John,
I’m still trying to figure out what “projections” have to do with cash flow. I think it’s pretty obvious that you’re dealing with one of many ‘business brokers’ who shoot the rest of us in the foot (feet?). I don’t know how long you’ve been looking for a business on the beach but I would definitely recommend patience – a LOT of it.
In answer to your last question – you’re totally correct – only a cretin would purchase a business before performing due diligence. I agree with Don – let’s see some reconciliations to tax returns or an audit.
For free advice about buying and selling a business, please visit http://www.AustinBusinessesForSaleBlog.com
Good Luck and Thanks!
Julie A. Barnes
President, SBX, Inc.
John, you are correct! There is no excuse for that. From your description, it sounds like the Broker was either completely negligent, ignorant, or – and this sounds the most logical, from your narrative – potentially fraudulent in her promotion of the business.
And Dan, I am uncertain I would offer information like “Dicretionary Cash Flow” to someone like John, with the simple disclaimer that the information was furnished by the Seller. How was this conveyed? In a verbal exchange, or through examination of Tax Returns? I think John is looking for something a bit more concrete, and while your statements certainly are more professional than the Broker about whome he was compaining, your comment provided less than a dramatic confidence builder. I am not suggesting you are doing anything wrong here; but in light of his difficulty, can you be more specific for him in suggesting the source of your profit information?
Web reference: www.bafgroup.com
