When you begin the process of selling your business, you may begin to think about the questions you will get from buyers. Knowing ahead of time what you may be asked is helpful because it allows you to think about how you want to answer questions about your business that will put your business in the best light.

A big caveat here – it is critically important that you not be offended by the questions that are asked, the number of questions that you are asked, or by how quickly a buyer wants answers. This is likely one of the biggest financial decisions that a buyer will make, so (1) they are nervous and want to be comforted by your answers to questions, (2) the will ask a lot of questions, and (3) they will want prompt answers to all of those questions.

Most sellers are initially only prepared for the very basic questions, like “What do you make in a year?” or “Why are you selling?”, but there are many more you should be ready, willing, and able to answer.

Here is a small sample of the most common questions a buyer may ask you:

Are you willing to offer seller financing, and if so what are you looking for in terms of a down payment?

What are the reasons that you are selling? Is it an economic issue? Is the business losing money? Is there a change (new legislation/a big new competitor/is the road moving) coming that will cause the business to falter? Is it a personal or health reason?

Are you willing to offer a substantial amount of training? Will you stay on for a period of time? What period of time would you be willing to work?

What do you really make? What is the full list of perks you take home, like a phone or car that is paid for by the business?

If you weren’t selling, what would you implement to keep the business growing? What are the changes you would make if you had the time and money to do so? Why haven’t you already implemented these ideas?

Are there any skeletons in the closet? What are the things you hope buyers don’t find out? Am I in for any surprises?

What kind of hours do you work? Do you take vacations? What are your day-to-day responsibilities?

Think about these types of questions beforehand, as well as trying to think like a buyer and come up with a few of your own. The more prepared you are with answers, the better you and your business will look in the eyes of a buyer.

Are you a seller (or someone who is thinking about selling) and you want to know about what kinds of questions someone might ask who is shopping for a business in your industry? Ask us! Leave a comment or question here, we would be happy to help.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com