Questions to Ask When Buying a Business
Purchasing a business is a major decision. When you are going through the decision-making process it is important to make sure that you get answers to the questions below so you can be sure that you are making a smart business decision that is right for you.
- Tell me about the business’ history and your involvement with it. – This is a great opening question to help you get to know the company and see how the owner explains their experience. This open-ended question also serves as a great opportunity to sit back and take notes. Once the owner has finished answering the question, you should have a good feel of their opinions and the business strategies that they chose to apply.
- Why are you selling the business? – This question is important for several reasons. You can get insight into what has motivated the owner to sell. You can also see what may be the most vital first steps that you would have to take as the new owner. This question can help establish a strong foundation for your transition to serving as the business owner.
- What are you going to do after the sale? – Asking this question can serve as an indicator of whether or not purchasing this business is a concern. If the owner is unable to clearly explain their next steps then you might want to press further into why they are selling the business so that you can be sure that you are making a wise decision.
- If you had 10 more years in this business what would you do? – Great insight can stem from this question. Maybe the owner has some advice about opportunities that you can take advantage of post-purchase. They may also be able to offer some suggestions into what should be avoided or modified so that the business can continue to be successful.
- If you had unlimited money how would you change things? – This question could also provide great ideas for when you start as the owner. The company could have great potential that has yet to be tapped or there could be some minor changes that never had the chance to be made. You can get both big and small ideas from this answer.
- What would you never change? – Asking this question lets you know what you don’t need to worry about. You may have expected that you needed to restructure the company, but the company may already be efficiently organized. The answer to this question can lower your stress level and help you avoid making any unnecessary decisions.
- What are the most important things you do to make the business run as the owner? – This question will make organization much easier. The answer can help you get started on your to-do lists as well as prioritize your various responsibilities. You may realize that certain times of the year require certain tasks while others may feature a lighter workload. You can also determine hiring needs so you can know what’s needed to start off strong.
After you ask these question you can ask more industry or company-specific questions as you see fit so that you can impress the owner and prove your interest and desire to make the company grow and thrive. Ensuring that you have answers to all of these questions and any other concerns will ensure you have all the information needed to make the right decision.
Andrew Cagnetta is the CEO of Transworld Business Advisors. Andy enjoys helping business owners/buyers realize the American Dream through business brokerage and franchise consulting and development. Transworld Business Advisors, LLC, is a worldwide franchise leader in business brokerage, franchise consulting and franchise development.
Thanks for sharing this information on the right questions to ask when buying a business. I definitely agree that it is something very important to consider, so you need to ask all the right questions. Asking about why the owner is selling the business, and the core aspects of the business are great ideas. It’s important that you are able to preserve the core values of the company, even if it isn’t owned by the same person.