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Aaarghhhh!!!!! pro formas are killing me.

Businesses should be listed on how much money they are making now --- not what COULD happen. So much time wasted waiting to get info and then have the old pro forma thrown at you. At least now I learned to ask that question first. There should be an industry standard on how cash flow is listed and pro formas should NOT be allowed. (One time expenses like a new AC unit or replacing a manager by working it yourself is cool but everything else is pure speculation and is wasting time.
I think some brokers think I am wasting their time but I want to buy a profitable business and then just fine tune it. The last five businesses I inquired about had decant cash flow listed but I soon found they were not making any money at all. Very frustrating.

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Answers (6)
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Freedom Business Brokers
Orange County, CA

I have a retail store in Orange county ,California with proven and verifiable sales if interested respond.

Aug 4, 2010
Julie A. Barnes, CPA
Small Business Exchange, Inc.
Travis County, TX

I agree with Don with one exception: business owners who have founded companies but have reached their capabilities and do not have the knowledge or experience as CEO's to move to the next level.

They're not losers - they just recognize their limitations. Otherwise, Don, as usual, is spot on!! For more information about buying, selling, or evaluating a business, please visit my blog:

Good Luck
Julie A. Barnes, CPA
President, SBX, Inc.

Aug 3, 2010
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The BAF Group LLC

As Brokers, we do not deal in Pro Formas, unless it is a business that is expressly, specifically stated to be a startup, such as when we represent a Franchise. Anyone that provides you with a Pro Forma, instead of Cash Flow predicated on historical P&Ls, or better yet, SIGNED Tax Returns, is trying to sell a losing business.

It is the same as "potential". Any time a Business Owner wants me to list his business and tells me how much "potential" there is, I thank him and tell him we would rather not list his company. It is that simple! "Potential" = LOSER, in the vast, vast majority of cases.

Ask for P&Ls or Tax Returns. Accept nothing else.

Aug 3, 2010
Buy-a- Company

A person can make a pro-forma say whatever they want.

And, what's worse, is that the targets listed on a pro-forma are rarely hit.

Window dressing at best. Misleading at worst.

Aug 3, 2010
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Corporate Financiers

I have experience with pro formas (prior Merrill Lynch Banker / Accounting background - U. of MI + Northwestern). Part of my service of arranging financing for small to mid-size businesses nationwide is assisting with pro formas. No charge to borrower (referral fee paid by lender).
Todd 312-488-3505

Aug 3, 2010
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average joe schmoe. we need to talk i have a great profitable business and numbers dont lie.

Aug 3, 2010

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