500 New & Refreshed Posts, Postings Daily
Over 8,000 Postings & 2,500 Resources
Assisting Buyers & Sellers Over 25 Years!


As A Business Buyer What Questions Should I Ask The Seller?

Posted By: Peter Siegel MBA: BizBen Founder, Lead Advisor.   Asking the seller straightforward questions and getting straightforward answers in return is an important part of the buying and due diligence process. In this Discussion, both ProIntermediaries and Advisors offer thorough questions you should be asking during your meeting with a business seller.

Comments & Feedback From Pro Intermediaries & Pro Advisors On BizBen:

This is a great question. Before I answer it I want to stress the importance of doing your due diligence and asking the "right" questions when buying a business. You will probably never make a bigger and more consequential purchase in your life. Making a bad decision when buying a small business can be disastrous for both you and your family. Making sure you know everything there is to know about a business (ask a lot of questions during the process!) before you buy it is the number one priority should have.

Asking the seller straightforward questions and getting straightforward answers in return is an important part of the buying and due diligence process. Here are some of the questions you should be asking during your meeting with the business owner/seller and his or her team of professionals (business brokers, agents, attorney, etc.):

1. Why did you get into this business in the first place? What excites you about it?

2. What is your day-to-day role in the business?

3. What would your ideal transition look like? What do you want to do post-sale?

4. What would be your expectations of a buyer?

5. What problem does your company solve for your customers? Why do your customers buy from you rather than others?

6. Can you walk us through the entire process of your service/product line - from sourcing to distribution to serving the end customer?

7. Other than you, who are the leaders/executives in the company? What are their current and potential roles?

8. How long have your employees been with you, and why do they stay?

9. What types of problems arise in your business (external and internal)? Who deals with them, and how?

10. At what capacity level do you currently operate? What capital expenditures should be made in this business annually, and on what?

11. What opportunities exist in this market through the next three, five, or 10 years?

The answers you get from these questions will help guide your decision when buying or moving forward on a deal.. Would love to hear what other ProIntermediaries and ProAdvisors on BizBen have to say on this topic - what questions do you hear most often from astute buyers and other Intermediaries?

One question I would ask if I were a buyer, and later confirm in writing, "Is there any personal property that you plan taking with you or does everything stay?" Yes, deals blow up because of landlords, disagreements over financials, etc., but sometimes there is a misunderstanding when the seller attempts to remove personal property that was never locked down in a written agreement. It might seem small, but buyers will oven think that if the seller is not being straightforward about something small, then what else are they not revealing. If the business has unique items, such as vintage surfboards on the wall, or a certain picture(s), that make the business unique, then get it writing that those items stay. Sometimes a seller has a family heirloom that is in the business that they plan on taking, which is fine, but it should be agreed to prior to close of escrow.

There's always room for more questions:

12. What mistakes have you made and how can I avoid repeating them?

13. Who have you found to be your best business and professional resources for advice and counsel? Why? Will they be available to me?

14. What are your personal relationships with your suppliers? Your customers? How dependent is future business dependent on transferring and maintaining those relationships? How likely is it that those relationships will or will not continue once you are out of the picture?

15. Have you thought about any contingency plans for the business (a "Plan B") if the market and economy don't evolve as we both hope they will? What are those plans?

16. How is your intellectual property protected? Do you rely on trade secrets? Are logos and business names trademarked? Are written, visual, and audio advertising, promotional, operational materials copyrighted? Are inventions patented?

17. Do your financial records reflect ALL of your business finances? Is there any income "off the books"? Are there any expenses "off the books", either paid with cash or personally by you, not through the business?

18. How available will you be and on what terms to assist or mentor me in taking over the business? For how long?

Place A Posting To Sell Or Buy A Business, Search All Postings

Sell A Business Fast: Place A For Sale Posting Now To Sell A Small Business - 7 Programs To Select From >
Find A Business To Buy Fast: Place A Wanted To Buy Posting Today - Best Way To Find & Buy A Business >
Search Business For Sale & Wanted To Buy Postings On BizBen - 500 New & Refreshed Postings Daily! >

Other Related Blog Posts, Articles, And Discussions You May Be Interested In

How To Select A Business Broker Selecting A Business Broker To Sell My Business: What Should I Look For?

What should your business broker do for you to successfully sell your small to mid-sized business? Well, there's many things that a qualified business broker can and should be doing for you. Multiple ProIntermediaries and ProAdvisors give suggestions and tips to sellers in this BizBen Discussion.
Due Diligence Gas Station Purchases Buying A Gas Station Business: What To Look For When Doing Due Diligence

Doing due diligence when buying any type of business is extremely important. Regardless of what type of business you are buying there are certain things you will always look at such as, financials, equipment, legal issues etc. We take a look at several angles for optimal gas station due diligence.
Giving Buyers Tax Returns Should Sellers Of Small Businesses Give Potential Buyers Their Tax Returns?

Should small business owners/sellers or brokers/agents give potential buyers direct access to past company tax returns and financials (profit & loss statements) either before or pre the due diligence process? Multiple ProIntermediaries and ProAdvisors discuss this topic on this BizBen Discussion.
Free Live Podcast Sessions Weds Noon Next Live Podcast Online Session For Buyers & Sellers: Weds 8/18 At Noon

Part webinar, part live podcast these BizBen Sessions are held on Weds at Noon. These FREE live sessions consist of topics related to buying and selling small to mid-sized businesses. Online topics regarding buying and selling small businesses are discussed by the top professionals in the industry.
Questions When Buying A Liquor Store Buying A Liquor Store: 3 Questions To Consider And Ask Before You Purchase

Buying a liquor store? First, ask yourself these three critical questions to find out if owning a liquor store is right for you. Questions like hands on vs absentee ownership, inventory turnover, licensing issues. Peter Siegel, MBA (BizBen ProBuy & ProSell Program Lead Advisor) explores this topic.
Are Upfront Fees Worth It In Defense Of Upfront Broker Fees: Why Owners Should Pay Brokers Upfront

Are up front fees worth it? In this BizBen Blog post Brian Loring (Business Broker) discusses the pros and cons of owners of small businesses paying business brokers and agents an upfront fee for their services. There are many sides and opinions expressed on this topic by both sellers & brokers!
Business Brokerage Questionable Practices Sellers: Watch For These Business Broker Questionable Practices

Lee Petsas (Southern California Business Broker) shares his concerns regarding some questionable business practices by some California Business Brokers lately. Other Business Brokers and Advisors weigh in as well on this BizBen Blog post with other "dirty tricks" they have observed and heard about.
Buying A Janitorial Service Janitorial Cleaning Services: 6 Considerations When Buying A Janitorial Firm

Buyers interested in buying a janitorial cleaning business will find companies in this industry for sale that are quite profitable. Careful due diligence, including the six factors covered in this blog post, is advised before completing a deal. Peter Siegel, MBA with BizBen explores this industry.
Dual Agency Brokers Does Dual Agency Really Work For All? ProIntermediaries Discuss This Topic

Who really represents the buyer? The selling broker or agent through dual agency? Many brokers and agents weigh in on this Discussion on BizBen. Bottomline is all business buyers need to know who really represents them and has their best interest at heart when seeking and negotiating on deals.
3 Car Wash Types To Purchase Buying A Car Wash Business: 3 Successful Types Of Car Washes To Consider

One of the most popular business searches (and eventual business purchase) on BizBen is the self serve and full service car wash. Peter Siegel, MBA (ProBuy & ProSell Programs Director) with reflects on three types of car wash models and what buyers should look for in a car wash purchase.