Investing in stocks of a small business is merely an extension of buying a small portion of a business run by someone else and enjoying your cut of the earnings. Small businesses sometimes are seen as wonderful gifts that, when well-nurtured, can produce a lifetime of...
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Three Basic Factors of Earnings
May 30, 2020 | Entrepreneurship, Money and Finance
Two businesses for sale could report the same numeric value for “earnings” and yet be far from equal. Three factors of earnings are listed below that tell more about the earnings than just the number. 1. Quality of earnings Quality of earnings measures whether the...
Unreported Income: “Show Me the Money!”
May 25, 2020 | Money and Finance
Prospective buyers don’t want to hear about “what the business really makes” – they want to see the books and records that show what is down in black and white. Here is the old story about proper accounting procedures, or lack of: A Greek restaurant owner had his own...
Is Your “Normalized” P&L Statement Normal?
May 21, 2020 | Money and Finance
Normalized Financial Statements – Statements that have been adjusted for items not representative of the current status of the business. Normalizing statements could include such adjustments as a non-recurring event, such as attorney fees expended in litigation....
Tackling Growth Delusions When Buying a Business
May 13, 2020 | Buying a Business, Entrepreneurship, Money and Finance
There is no doubt about it, it can be exciting to buy a new business. However, in the process, it is very important that you don’t become unrealistic about future growth. Keep in mind that in the vast majority of cases, if a business is poised to quickly grow...
The Do’s and Don’ts of Seller Financing a Business for Sale
Mar 18, 2020 | Buying a Business, Money and Finance
Seller financing a business for sale is when the owner is willing to personally finance a portion of the purchase price. Oftentimes, this increases the likelihood of the selling your business. While it is tempting to consider because of the heightened chance of a...
How Instagram Went From Idea to $1 Billion in Less Than Two Years
Mar 13, 2020 | Entrepreneurship, Money and Finance
The entrepreneurial dream of selling a startup for megabucks came true for the founders of photo-sharing app Instagram when Facebook agreed to buy the company for $1 billion in cash and stock. It's a remarkable outcome for a young company that still isn't generating...
Key Elements For Every Partnership Agreement
Feb 24, 2020 | Buying a Business, Entrepreneurship, Money and Finance
You should never forget that your partnership agreement is, in fact, one of the most important business documents you will ever sign. Many people go into business with loved ones, relatives or lifelong friends only to discover (once it’s too late) that they should...
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