When you are looking at buying a business, there are a lot of questions you will want answered.
How much does the business make?
What kind of numbers were on the last three years of tax returns?
How many employees are there?
How much are the monthly lease payments?
While the answers to these questions will be pivotal in helping you determine if a business fits with the goals you are trying to achieve, the more important questions will be the ones that go beneath the surface and delve into the motivations of the seller. The motivations of the person who has owned and operated this business (and now wishes to sell and move on) will speak volumes about the business and about the scenario you are about to put yourself in. This is part 2 of a two-part series addressing the motivational questions you should be asking sellers.
Question 4: What does the seller want out of the sale?
Not all sellers are motivated by money alone. In many small businesses, the staff have become family, and a seller may be very concerned with the future of key employees. In other cases, the reputation of the business within the community may mean a lot to a seller, and they will want to hand-pick a buyer who will continue that legacy. By asking what a seller really wants out of the deal, you will find out many things you wouldn’t have otherwise – like who the pivotal employees are and how the business ranks in the community.
Question 5: If the seller had unlimited time and resources, what would they have done to grow the business? What has prevented these changes from taking place?
In any business acquisition, one of the major considerations will be opportunities for growth. Where can the business go in the future? Who better to ask than the person currently holding the reins? Many small business owners have great ideas for growth and expansion that they have cultivated over the years, but for whatever reason have not had the time or money to implement. As a new buyer, these ideas can give you a great idea of the potential of the business, as well as give you ideas for changes you can plan to implement yourself.
Are you a business buyer who wants to know what kinds of questions to ask sellers? Do you have additional questions about what kinds of answers you should be looking for? Ask us! Please feel free to leave us a comment or question here, and we would be happy to assist you with your business buying questions.
Want to read Par t 1? Click here.
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