8 Questions You Most Likely Will Be Asked When Selling Your Business


Question You Will Be Asked When Selling

When selling your small business, you'll be bombarded with questions - from the brilliant to the ridiculous.

You need to be prepared for them all. The more you're prepared the better experience you'll have with potential business buyers.

Tim Cunha (SF Bay Area Business Broker) reviews many of these possible questions. Here are some questions you can expect to be asked:



1. Why would you want to sell your business?

Although, as a business broker, I tell business owners that the "best time to sell is when you're doing well," buyers always want to know the "real reason. My response usually is simple: it's the right time for the seller because of retirement, a move to another locale, or another business opportunity they want to pursue. And then I ask the buyer a simple question: "Would you want to buy a business that isn't doing well?"

2. What does it cost you to acquire a new customer?

The buyer wants to know if you have an economical, practical, scalable, and sustainable system and process for getting new customers.

3. What is the extent of your market penetration?

The buyer, being interested in future growth, needs to understand how big the current market is and what percentage of it you already own. And, how can that market be expanded, vertically and horizontally?

4. Who are the buyers of what you're selling?

Strategic buyers - those already in your industry - are looking for potential synergies between what you sell and what they sell. Knowing the details of your customers' demographics, you will be better equipped to help a buyer assess a strategic fit.

5. How do you produce, acquire, or process what you're selling?

By asking this question, potential buyers can assess the uniqueness and distinctiveness of your method of creating whatever product or service you make or deliver. Prospective buyers need to learn if you have proprietary systems or procedures that make you stand apart and would be difficult for a competitor to replicate. The more unique you are, the more valuable you may be. For obvious reasons, they will want to know if any of this unique or proprietary value depends on any one (or more) specific persons.

6. What (if anything) makes your product or service unique or special?

Knowing if there are aspects of your business that will protect the buyer from current and potential future competitors is vital to their assessment of your value. What, if anything, have you done to distinguish yourself from and protect yourself from the competition?

7. What are your operations and management processes?

Depending on the type of buyer, they are going to want to know how easily they can take over day-to-day and strategic management, or integrate it into their existing operations. They will want to know how you manage your bookkeeping and finances, marketing and sales, purchasing procedures and vendor relations, procedures for managing materials and inventory, and methods for producing and delivering the product or service.

8. What employees are essential to your team? ... to future success?

Any potential acquirer needs to understand the dynamics of your team—how deep is "the bench?" They need to know who are the key players, what motivates them, and how they will be incentivized to stay with your business once you are no longer the owner.

This list is not exhaustive, but it is a good insight into the kinds of questions you, and your broker, need to be prepared to answer to properly represent your business to prospective purchasers.

Categories: How To Sell A Business, Selling A Business

Contributor:

Tim Cunha
Areas Served: San Francisco Bay Area
Phone:  650-600-3751 Cell, 650-600-3751 Text
SF Bay Area experienced attorney, & business broker. I & my EvergreenGold team offer owners sound advice & expertise to build business value & achieve profitable sales. For a FREE business evaluation & SWOT analysis for your business call me direct at 650-600-3751, 650-866-5393 Text.

Comments Regarding This Blog Post


I have buyers who often ask, "How long have they been there?" The buyers want to know, both how long has the business been established and how long the current owner has been there. If the business has only been around for a short period of time or if they still have a "grand opening" banner in front of the location, that is a topic of concern for a buyer.


As someone who specializes in restaurants, bars, etc...many of the buyers who I work with are interested in specifically as to why the seller is selling the business. The buyers are also interested in how long the business has been established, because this determines the goodwill of the business in the eyes of the buyer. Many buyers who buy restaurants are also focused on what type of training is involved and how long it will last, because they want to keep the business as it is. If the buyer is interested in changing the style of food, they may also be interested in seeing from the seller if they can do that, and if any other businesses in the shopping center have exclusivity clauses in their lease.






  Helpful Resources To Assist In Selling And Buying California Businesses
Elizabeth McGovern: Escrow Services - San Francisco Bay Area

McGovern Escrow Services, Inc., is a leading independent escrow company. We are a trusted partner with our clients, assisting them through the tangled bulk sale & liquor license transfer process. We provide attentive, quality & innovative customer service. Phone Elizabeth McGovern at 415-735-3645.

Janet Carrera: Escrow & Bulk Sale Service - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Mike Brewer: Liquor License Broker, ABC Consulting Service

Liquor license brokerage and consulting services. We provide: Alcohol License Transfers Application Consulting & Processing, Liquor License Purchases & Sales, City Zoning Permits & Land Use Entitlements, Public Convenience or Necessity Findings and Letters. Phone Mike Brewer direct at 800-437-1100.

Timothy Cunha JD, Business Broker: SF Bay Area

SF Bay Area experienced attorney, & business broker. I & my EvergreenGold team offer owners sound advice & expertise to build business value & achieve profitable sales. For a FREE business evaluation & SWOT analysis for your business call me direct at 650-600-3751, 650-866-5393 Text.

Peter Siegel, MBA: Business Purchase Financing Solutions

Niche business purchase financing advisory and loan placement services with SBA and Non-SBA Financing, Retirement Fund Rollover Solutions, Combo Financing Packages. To get professionally pre-qualified or more information on the ProBuy/ProSell Programs: 925-785-3118.

Jim Saxton, Liquor License Broker & Consultant - SF Bay Area

20 years experience of local governmental requirements, such as Police Departments, Zoning / Planning Departments, and ABC District Offices, my company Liquor Licenses of SF Bay Area is very qualified to resolve all of your concerns during the liquor license transfer process. Call 925-787-0770.

Manjit Singh, Business Broker - SF Bay Area, Central Valley

Assistance in the SF Bay Area & Valley. Contact me about buying or selling a restaurant, liquor store, gas stations, markets, and c-store businesses. If you are looking to buy or sell a SF Bay Area, Central Valley liquor store, market, c-store, restaurant, etc phone me direct at 510-417-9429 Cell.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Buying A Business: Why Is It Important To Look At Its Tax Filings?

Business tax filings are very important factor in determining the credibility of business financials. Just seeing those financials, you can't determine whether those values are overstated or not. Some business owners provide made up financials to buyers - so, that's where tax fillings come in.

Due Diligence Checklist: 10 Key Items To Investigate When Buying Businesses

Buying a California small business involves reviewing due diligence checklists so buyers can learn enough to determine whether to proceed with a deal. Here's a due diligence checklist. Peter Siegel, MBA (BizBen ProBuy Advisor & Business Purchase Financing Expert) at 925-785-3118 shares his views.

BizBen Podcast & Webinar: Business Purchase Financing And SBA Loan Options

Ever wonder what is involved in obtaining business purchase financing to buy a business or franchise? Peter Siegel, MBA who has over 25 years advising on all types of financing for business buyers in this BizBen Podcast & Webinar - SBA loans, Non-SBA Financing, Alternative Financing Sources.

Business Purchase Financing Expert Peter Siegel - Tips On Proving Cash Flow

What are the actual "provable" adjusted net earnings (cash flow) of a small to mid-sized business being purchased? Buyers need to look carefully at all financial info for the "real" adjusted net income/cash flow. Peter Siegel, MBA (BizBen ProBuy & ProSell Lead Facilitator) at 925-785-3118 explains.

6 Simple Things To Increase Business Value Before Offering It For Sale

How do you value a small business before putting it on the market? Tim Cunha, JD offers 6 items all business owners should consider. Other advisors and business brokers also weigh in on this very important topic especially when over 70% of small businesses never end up selling (due to pricing).

Thinking About Selling A Small Business? Know These 8 Factors That Matter

The likelihood of selling a business is often determined by external factors in the marketplace. Here are eight influences on how easy, or difficult it might be when selling a small California business. Peter Siegel at 925-785-3118 (BizBen ProSell Program) explains these factors for owner/sellers.

Purchase A Small Business With Limited Or No Cash: Financing Tips For Buyers

Purchasing a business with no money down can be difficult, but not impossible. Financing a business purchase or down payment can often be accomplished with these strategies offered from Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy & ProSell Program Advisor with BizBen) in this post.

Getting An SBA Loan To Buy A Small Business: Dispelling Some Major Myths

When seeking SBA loan financing many potential business buyers have wrong information about the process of securing the best financing to buy a business. Peter Siegel, MBA (at 925-785-3118) a business purchase financing expert delves into the myths and facts regarding SBA loan financing.


Tim Cunha Business Brokerage
Redwood Escrow Bulk Sale Services
Escrow Services Diane Boudreau-Tschetter
John Willingham Sunbelt Business Brokers
Facebook
Twitter
Linkedin
Vlogs and Podcasts
Instant Email Alerts On BizBen
Business For Sale California Stats
New Postings Reports On BizBen Sign Up
BizBen Blogs And Articles
BizBen ProSell Program
Advertise On BizBen

BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved



Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Business Purchase Financing Help - Expert Tips For Faster SBA Loan Appro...
Read More News
Business Purchase Financing: SBA Loans & Non SBA Financing Solution Serv...
Read More News