So let me ask you this, seeing a P&L with a loss would make you turn the other way?
If I said "This inn has revenue of $150,000 per annum" approx, and you saw the P&L showing a loss, you would immediately figure it was a dog of a business?
What if they have a high mortgage, or what if they have no mortgage? Do you take this into account?.
"f I said "This inn has revenue of $150,000 per annum" approx, and you saw the P&L showing a loss, you would immediately figure it was a dog of a business?"
I wouldn't, not on just that information. $150K revenue doesn't seem too bad (at least from my perspective), so you really have to study the expense side to understand why they are too high. Yes, look for opportunities to increase revenues, but make sure you understand the expenses and can control costs!
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this is what kind of baffles me about the situation in the USA - if i was selling as a business I would expect to show at least 3 years of accounts broken down in to various sections ie mortgage, wages (how many staff, how much paid and how much paid as owners salery), maintenance, tax, food etc - and thats just to start.
For serious buyers who had signed a non disclosure might even expect to show what we call our detailed accounts which get right down to how much spent on everything ie beds, towels and so on not just the final yearly total figures.
You also have to remember that everything is on a bigger scale ie I am 11 bedrooms which means 21 place setting for breakfast which means at least 30 place settings of cutlery, crockey and so on, 11 bedrooms of sheets at least 3 sets each (if I did my own) and so on everything needs to be bought in triplicate and replaced a lot more often ie furniture and lamps as they take a beating from guests.
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