Tips To Buying A Car Wash
- Author Greg Schale
- Published April 30, 2011
- Word count 506
Some people have over leveraged their car wash purchase with mortgages lasting 20-25 years to make the deal work which is crazy. Go look at 20 year old washes and think about how they compare to today's washes
When looking at the numbers, do them on a ten year loan. Remember this isn't a residential real estate sale where a 25 year loan is common. Once you see the numbers will not begin to work, then walk away. If you must, do the numbers on a 15 year loan but be sure you note an expected rate of return, of course in addition to your management salary, of at least 20% or more. Don't kid yourself that appreciation will make up for a bad deal. This is a quick way to go broke.
When buying an existing facility ask the owner for three years of tax returns and see how his business is really doing. If the owner claims the tax returns don't really include all of the sales that were really made, you had better think twice about this deal. Not only has the owner admitted to tax fraud but you have to ask what else are you being lied to about. While I can appreciate saving money on taxes as the next guy, this is a bad way to start out, plus the bank will only loan a certain amount based on the document income on the property. Also if the owner won't give you the tax returns to protect their privacy or other bogus reason, run from this deal.
Here are some things to look for when buying an existing car wash
· Look at the water bills. Only compare gallons used, not dollar figures. This helps you to figure whether the increase in sales over the three years of tax returns and not inflated to justify a higher selling price. If an owner is devious enough (most don't think out far enough to manipulate their numbers) but they can show their sales as being higher that actual and get someone to pay a higher price. The water bills will verify how much water is being used which is in direct relation to sales.
· Request bank statements from the seller and cross-reference those with the tax returns. Bank deposits will show if the cash generated over the year was actually deposited and is real.
· Ask to place security tape on the cash boxes on a certain day and come back the same day the following week with the seller to count the money, verifying that the security tape has not been broken and can verify the boxes have not been stuffed with cash. Sellers can easily stuff the changers and bill acceptors as well as falsified tax returns as cash is easy to manipulate;
· Have a written document certifying the tax returns you are viewing for the car wash is only for that property and does not include any other businesses.
Work hard on your due diligence. It is well worth to keep from making an expensive mistake.
Original article - www.StartupInformant.com
StartupInformant.com is great place to learn more about starting a business with articles written only by successful business owners where you will find useful information and tips to start your business and avoid mistakes made by many entrepreneurs.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- The Transformative Power of Yamaigel’s Certified Gel Eye Masks
- Checking account with cell phone protection!
- Keeping Cool This Summer: Air Conditioning Installation Services in Milwaukee
- A DIY Guide to Fixing Your Garage Door (with a Call to Garage Door Magnolia When All Else Fails!)
- Can a Bent Garage Door Be Bent Back into Shape? Don't Panic, Call Kiki Garage Door!
- How Can I Tell If My Garage Door Opener Sensor Is Bad?
- Maximizing Profitability: The Economics Behind Customizable Design Assets
- Exploring the Hidden Gems of Si Racha, Thailand
- DIY vs. Professional Movers: Pros and Cons in 2024
- MK Web Celebrates Top Position in Bourne's Premier Web Design Rankings
- The Road to Sobriety: Understanding Substance Use Disorders
- MotorKote Ultimate 40/60 Synthetic Hyper Mix 5W-30
- Exploring Denver on a Dime: A Frugal Travel Guide
- Top 10 Ways Production Scheduling in Business Central Transforms Manufacturing
- Strength Training and it's Incredible Benefits for Fat Burning
- Enhancing Home Security with Aluminum Shutters: A Focus on Weatherwell Elite
- 5 Easy Ways to Make Oral Hygiene Fun for the Whole Family
- Transforming Plastic Extrusion Machines into Recycling Powerhouses
- Unraveling the Potential of Plastic Extrusion Machines
- The Rise of Plastic Recycling Machines: A Step Towards Sustainability
- Strawberry Cheesecake Ice Cream: OMG! Unreal!
- The Advantages of Using Professional Home Cleaners in Ilford
- 8 Compelling Reasons to Hire Professional Home Cleaners
- The 12 Steps Narcotics Anonymous Program To Recovery
- Send Money to Tanzania: Effortless Transfers with SafariRemit
- Stylish Savings: 10 Frugal Ways to Stay Fashionable in 2024
- Fly Cheap With FlightPapa To Any City
- How Collaborating with a Software Development Company Can Propel Your Business Forward
- A Comprehensive Guide to Choosing the Best Hair Transplant Method
- 15 Frugal Tips for a Memorable Wedding Day