Showing posts from December, 2017

Should you Buy or Start a Business

Once you catch the run-my-own-business bug, you may start to wonder if you should start or buy a business. While either option is a worthwhile approach, there are some advantages (and disadvantages) that are may be overlooked during your decision making process. I've tried to summarize some of these items in this chart.

This chart assumes that you do 'everything right' buying or starting a business. A bad buying decision could be worse in all areas, as could a bad startup plan. Either approach is a good approach so make sure, that in addition to the pros and cons, you make the choice that works for you.

The Basics of Financial Statements -- Income Statement Terminology

An Income statement is to a business, what the scoreboard is to sports. It tells you if you winning or loosing and by how much. If you are buying a business the income statement tells you if the business making money, if its selling its products, and how good it it is at doing both.

The income statement reflects the performance of the company over some period of time time.  The income statement is also called a profit and loss (P & L) or an earnings statement

Sample Income Statement  

Income Statement Line by Line
1. Time Period. Statements are usually by year or quarter (3 months)  But may also be to -date (partial year up to the date of the income statement). Multiple years may be shown on the same statement to help with comparisons.

2 -5. Revenue section tells you about the money a business brings in. Also called sales. There may be multiple sources listed, of different types, based on the type of business. In the case of the hot dog stand It's broken out by type of customer…