You have started the process of selling your business. One of the most important steps of the entire process involves anticipating the questions asked by buyers that range from a small group of investors to one of the most experienced business brokers in the area.
Here are a few of the common questions that represent part of the Sunbelt selling process.
What Can I Do As The Buyer to Grow The Business or Tap Into New Markets That You Never Capitalized On for Whatever Reason?
When you search for a business to buy, you are not as concerned with the current financial status of the business as you are concerned about the potential for growth. One of the possible reasons why a business owner wants to sell is the business owner did not tap into new markets or implement any other type of growth plan.
Consider this question as the icebreaker during your Q&A session. You should be able to discover how upfront a business owner is about selling the business.
Who Are Your Key Employees and What Do They Do?
Continuity is one of the keys to making the transition to the position of a new business owner. The key to operational continuity is to identify the most important employees and learn what they do to contribute to the success of the business. Key employee retention should be a priority and the seller of the business should let you know who you should recruit to stay on board after the sale of the business.
How Can I Be Assured that Key Personnel Will Not Exit Post Closing?
You should ask the owner of the business what his/her take is regarding how likely key employees would stay. If there is any chance someone would leave you should be asking what can I do to ensure that they will stay post-closing. Ask to meet with one key employee you learned about with the answer to the previous question. Employees occasionally become uneasy during a transition from one business owner to the next business owner. New owners should come in on day one with something new in terms of benefits or another value-added scenario that will create a good first impression and calm any nervous employees immediately.
Can You Provide Me With a SWOT Analysis About Your Business and This Industry?
While very few small businesses have a pre-prepared SWOT analysis ready, you can walk them through each of the elements verbally in order to get your head around the strengths and weaknesses of this business. You can expect to review several financial and business operation documents that should give you an idea about the viability of agreeing to purchase a business. A SWOT analysis presents four important pieces of information: strengths, weaknesses, opportunities, and threats. By analyzing internally and externally driven data, you can develop new strategies that drive the growth of your new business.
The goal is to learn as much as you can about the business, while both parties maintain confidentiality.
Why Are You Selling Now?
This is another question that requires you to use intuition. Does the response provided by the business owner seem authentic and reasonable? Some of the reasons why a business owner wants to sell a business have nothing to do with performance. Maybe the business owner has an eye on retirement or wants to invest in a smaller business that takes less time to manage.
Asking this question can give you indications of what problems the business faces. Before you sign the proper legal documents, you need to know what you are up against when you take over a business.
Does Your Business Face Any Legal Actions?
If your business is involved in any type of legal action, prospective buyers such as business brokers will turn elsewhere for investment opportunities. Not only must the answer to this question be no, but you also should ask for a notary signed document that verifies your new business does not face any pending lawsuits.
Sunbelt Business Brokers promotes more than 200 businesses for sale portals. We make a considerable investment in marketing your business, which is why we are selective about the business listings we promote. Sunbelt Business Brokers sells more businesses than anyone else in the world. We offer custom deal structures, dedicated financial advisors, and compelling marketing assets that get our customers the best prices for their business.
Contact Sunbelt Business Brokers of Naples for a free valuation & consultation.