Five Questions to Expect from Interested Buyers

When you’re selling a business, you can count on the fact that you will be presented with a lot of questions. When you look at things from a buyers’ perspective, it only makes sense that they would want to feel like they have a full understanding of the ins and outs of the history and future of the business. Here are five of the most common questions you can expect.

1.    Why is this business for sale?

Usually, sellers exit due to both personal and professional reasons. Think through your reasoning ahead of time and be prepared to be asked this question. Buyers may also ask you about what you will do if you do not end up successfully selling your business.

Don’t be surprised if you also get questions about your personal history and background. Prospective new owners will want to know if they have the necessary skills and leadership criteria. Therefore, questions about your background are completely customary.

2.    How do we find out the company procedures?

Buyers will expect your organization’s procedures to be documented with a SOP or standard operating procedures. Also, they will be looking for manuals on company policies and practices. This type of documentation shows what it’s like to run the business and the difficulty involved.

Part of the reason that you may get asked about this before the sale goes through is that buyers will want to get started immediately after they take over ownership rather than pausing operations. They will also want to know about your suppliers and what they can expect in working with them. In most cases, they will want to transfer preexisting contracts from these suppliers.

3.    What are your assets or liabilities?

This is another question a buyer may ask in order to understand the business better. If there is intellectual property, the buyer will want to know if they will gain ownership. The same thing is true about licenses, permits, and leased equipment. Of course, it goes without saying that buyers will want to know about any past or pending lawsuits, so be prepared to reveal that kind of information.

4.    Will you offer ongoing support?

In some cases, buyers want a period of time where they will be supported. If this is the case, they will want details of your involvement. It’s important to figure out in advance what kind of support you are willing to give a buyer and over what period of time.

5.    What could you have done differently?

If buyers ask you this question, it is likely because they are looking to learn if there were opportunities you considered in the past but didn’t proceed with. More than likely, they are trying to gauge opportunities that may exist when it comes to in marketing, product lines, etc. Along the same lines, they may ask you about your marketing efforts in the past and what has worked most effectively. Once buyers find out this information, they will feel they have a better idea of how they can grow the business.

It’s always a good idea to put yourself in a buyer’s shoes. What would you want to know if you were buying a new business? Surely you might have a long list of questions on your mind in order to gain the necessary information. Once you better understand a buyer’s frame of mind, you will be better prepared to answer their questions in the best way possible