What Questions Do Buyers of Companies Ask?    

Buying a business is a complex process. As a buyer, you have to do your due diligence. But how do you do this?

By having a list of questions that will reveal the details of the business you want to buy. If correctly done, the questions will show the obvious and hidden business details.

Remember, not every business deal is the best. Yes, the financials and foot traffic might be excellent, but don’t take it as the gospel truth.

Don’t worry if you do not know the right questions to ask. Read through this article for insightful questions to ask the business sellers.

The questions are also relevant to the business sellers. Knowing what the buyers will ask helps you better prepare the responses. And who knows, the replies you give might help close the deal.

Some of the common questions that buyers ask include.

  1. Why Are You Selling Your Business?

Yes, the business traffic is good and the sales are amazing. But why are you disposing of your firm?

Theseller’s motivation does magic in revealing the situation of the firm. The main reasons are either professional, personal, or a combination of the two. For instance, one might sell their establishment to open a new firm, buy a house or retire.

At times, the sellers find it hard to keep their business thriving.

  1. What Skills Are Needed to Run this Business

The question is common to new buyers in the market. The buyers want to know whether they have the skills necessary to run the enterprise.

As a seller, share the skills that have kept you profitable in the industry. Also, don’t hesitate to share the shortcomings you’ve had and which you think might propel the enterprise to greater heights.

  1. How Have You Arrived at the Asking Price?

Yes, a serious buyer will come up with their independent valuation process. However, they’ll still want to know the calculations you used to get the asking price. In most cases, the business

Be sure to contact Nash Advisory for a comprehensive business valuation.

The common valuation techniques are asset-based or income capitalization methods. However, a multiplier valuation method is more effective in estimating your business value.

  1. Who Are Your Key Staff, Suppliers, and Customers?

Staff, suppliers, and customers are crucial to business growth and survival. As such, it’s important to know the business dependability of these key stakeholders.

At times, gauging the contribution of customers and suppliers is not easy. Unless they’re bound by a contractual agreement, there’s no guarantee they’ll come back. In the same breath, there’s a problem if the firm relies on two or three employees including the current owner.

  1. How Would You Enhance Business Growth?

A business buyer wants you to demonstrate the strategies you’ve had to enhance business growth. Plus, they also want to know whether you’ve implemented these strategies in your firm. By quizzing you on this point, the buyer can ascertain the business potential.

For instance, if you’ve tried several strategies without success, then that’s a risky investment to them.

Most people dream of having a business to their name. One can either start a firm from scratch or buy an existing firm.

For the latter, the potential buyer will have some questions for the seller. The answers to these particular questions will help close the deal. As a seller, it is your responsibility to ensure your replies are correct and accurate.

Hemant Kumar
Hemant Kumar is a project manager at Tridindia with more than nine years of commendable experience in writing about LMS, translation, and IT. His unmatched talent and passion for digital marketing gave him the opportunity to work as a multi-tasking project manager at TridIndia’s sister company, Link Building Corp. Today, he contributes to the world by imparting knowledge on SEO, link building and internet marketing etc., that helps business owners grow their online business.