I get absolutely crazy whenever a buyer tells me they are looking to buy a “cash” business and I get equally nuts when a seller tells me there is more revenue than what they show.
I know, some of you are thinking I am out of my mind, and that may be so in regards to some matters, but when it comes to running a business or purchasing one, unreported income (a.k.a cash sales/under the table income/off the books money, etc) is a curse, not a blessing.
From a buyer’s perspective, how can anyone possibly pay for something they cannot prove? Talk about someone being out of their mind that is the definition of insanity.
Why would anyone ever buy a business based upon the seller telling them “there is plenty of cash that comes in that I don’t report” (wink, wink).As a business owner, unreported income is not only illegal, it is plain stupid. First, I guarantee in any business, if the owner is stealing money, so too are the employees.
If you run a business then run it properly. Put all of the income on the books. Doing anything else is not only illegal and cheats the government, it cheats yourself from investing more in the business and from the added value you will leave on the table when the time comes to sell.
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