Don't be a Dummy! Sellers want to maximize their price. And they're willing to cheat you! How do you catch them?

My clients: a married couple.

Their goal: buy a company and leave their corporate jobs behind.

The deal: a business close to their home. Seemed promising. High enough cash flow for them to retire.

2 million in revenue. $550k in SDE. We were looking at financials during the covid dip - but the numbers were trending up and close to the pre-covid level. BUT…

Financials were rebounding back to pre-Covid levels. All of a sudden, the business had cut $400k of expenses? And they just swore it was sustainable....sure

Then things got worse. Seller mentioned a small # of cash payments he paid to contractors from time 2 time. Unfortunately, cash payments are near impossible to track. Seller says it's only $50k. But if it was $500k, we would not know. At $500k, there's no deal.

Wanna know WTF happened really? Seller fired ppl. Then paid them under the table. So the $550k of SDE was really ZERO. No deal....dead on the line.

Seller cheated. My husband/wife client would have bought a disaster. Ruined their lives. Frying pan into the fire. While the seller and broker smiled and got paid. That's why you get a QoE done. Don't be a dummy.