When speaking to a business seller, ask questions that help you understand the company's financial performance, reasons for sale, day-to-day operations and potential risks. These discussions should help you determine whether the business meets your acquisition criteria and identify areas that require further investigation before making an offer.
Start with these key questions:
- Financial performance: How has revenue and profitability changed over the past three years? Are there any outstanding debts, liabilities or significant upcoming expenses?
- Operations and customers: How involved is the current owner? Which employees and customers are most important to the business? Are there any contracts approaching expiry?
- Reason for sale and future plans: Why is the owner selling? How long have they been considering a sale? What opportunities or challenges do they expect the business to face?
For example, if the seller explains that they are retiring, ask whether a management team is already in place and what support they would provide during the handover.
Where possible, request supporting financial records and documentation rather than relying solely on verbal explanations.
Read more: Due Diligence Checklist for Buying a Business
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