#'s Verification

[allthis4adream1]

So I am currently in talks to acquire a location. However as we all know (or at least from my experience) it is almost impossible to verify the #'s and financials on a wash. The seller gave me a spreadsheet he created which is basically toilet paper since well..he created it. How can i know for sure what to expect?

No car counter. Said you can get an idea on car count based on chemical use
Also, he mentioned how he doesn't put all the cars through his computer system. How can this be?


To sum it up. How do I verify car count and net income if nothing is documented? Any thoughts?

 

[Jim L.]

Why don't you ride shotgun with the person who gathers the money for 30 days or so. This way you can see for yourself.

 

[gsgriffin]

undocumented income is 0 income. If you can't take it to the bank, it didn't happen. Shame on him for skimmig, supposedly. The minimal tax you pay on the income, compared to the value it increases your wash, and making it easier to sell with verifiable financials, is well worth it.

I was lucky enough to buy my first wash with verifiable daily and monthly cars and dollars. Of course, with the auto-attendant it is much easier. All numbers matched within a couple of hundred, and all of the money was deposited.

Good luck!

GSG

 

[smokun]

Fresh Start

In the commercial real estate business, there's an old axiom: Sellers and buyers are frequently liars.

If you plan to upgrade the operation, another option is to have a feasibility study done that addresses the marketplace in real-time. The numbers will be theoretical, but you can create a parallel universe from which to compare... or simply decide on the merits of your research.

I suggest you recognize that the value is mostly in the site location and the condition of its improvements, so unless the wash is really exceptional, "customer good will & reputation" is as volatile as ever. Figure on buying the real stuff, and avoid the fluff. Plan to create your own image and good reputation.

-Steve

 

[Waxman]

Ask to see 3 years tax returns. I would never even consider a carwash purchase without some actual tax returns to look over. You not only want a clear picture of income totals but of expense totals as well.

How else could you get a true financial picture of the business?

 

[pitzerwm]

Something you need to pay attention to, when looking at tax returns is if this person has other sources of income, its very easy for him to move the revenue around to suit his needs. Not cheating as far as the IRS, but could be a big difference to you.

 

[Red Baron]

So I am currently in talks to acquire a location. However as we all know (or at least from my experience) it is almost impossible to verify the #'s and financials on a wash. The seller gave me a spreadsheet he created which is basically toilet paper since well..he created it. How can i know for sure what to expect?

No car counter. Said you can get an idea on car count based on chemical use
Also, he mentioned how he doesn't put all the cars through his computer system. How can this be?


To sum it up. How do I verify car count and net income if nothing is documented? Any thoughts?

If he has a camera system ask to sit and replay to count cars for the last few weeks to verify some of the numbers.