Unreported Cash, The Dilemma

In our experience a large percentage of typical small businesses have an undocumented stream of revenue that is hard to validate. All too often the business will not sell because the owner has failed to disclose all of the earnings. As a buyer should you walk away from the transaction because disclosed profits are minimal but the owner claims they earn "lot's of cash"?..... We believe you should dig in and see if you can validate the claim of earnings. This can be accomplished though various analyical and observant means and you should seek out professionals to help you. Futhermore, if you do buy the company make sure any historical exposure with undislosed earnings and taxes remains with the seller.

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