Before buying any asset…

When business reports look too appealing… >>> Let me double-check

Dear business owner

Are you going to buy an asset… that is NOT worth it?

Take a look at this inspiring story.

A good friend of mine asked me for advice:

“I want to buy a Hotel in Luzern… but the price seems crazy!”

Sure, Luzern is a nice city. A tourist area in Switzerland. Having a hotel there can be a great investment.

I proposed him to verify the business accounting. I traveled on site… to identify possible discrepancies.

The general manager of the Hotel turned red, and looked at me as if I was a witch or something…

Here’s why.

I was sitting in a comfortable chair, in the lovely lobby, full of 1900’s paintings, “Art Deco” style. Looking at the Hotel’s General Manager, with the financial reports on my laptop.

I just asked:
“I guess you hire a lot of Extras in summer?”

Surprised by this question, he looked embarrassed:

“Yes a lot of Extras.”

My friend told me:
“How in the world did you know about the Extras? You only took one look at the financial reports…”

I replied:

“Well, I’ve been making accounting for various industries. There are THINGS that I know.”

“I’ve detected that the amount of wages and the social insurance do not match. This is not the correct ratio. The only explanation: workers not declared or Extras…” 

I guess I was a bit too close to the truth…

So I advised my client not to buy this hotel and look for other opportunities.

Don’t buy a business with bad ratios. Avoid any fiscal problem.

If you need to double-check, I’m ready to help.