Questions to ask when buying a business

There are lots of items for a business buyer to resolve before they finally close escrow and own their business. If the buyer asks a question and they either don’t get an answer or don’t like the answer it can mean the end of the buyer’s interest.

If you are looking to buy a business where do you start? Here’s a set of quality questions to start your process to buy a business.

One question to answer before you start asking your questions

The question is “Do you really want to buy a business or do you think you want to buy a business?”

From my perspective there is a big difference. So many buyers gingerly enter the business buying process by completing a Non-Disclosure Agreement so they can get more information…and then stop.

Buying a business is very difficult as it not only requires asking a lot of questions but also taps into many emotions of the buyer. That is, it takes time and a lot of hard work.

My suggestion is not to start the process unless owning a business is really what you want to do. If you are not sure about the answer to that question, spend some time finding the answer as the question is too important. It could save you a lot of time, money and worry.

Read More: Here is more information about the steps to buy a business.

Ten questions to ask when buying a business

Here’s a good set of questions to ask the seller of a business and/or their business broker. This set of questions is not exhaustive but provide a great starting point. Use these questions to get your buying process going and then vary them depending on the business you plan to buy including the industry it is in.

How long has the business been in existence?
How long has the seller owned the business?
What are the hours the business is open?
What are the hours the owner works?
How many employees work in the business and what hours do they work?
Are there any family members that work in the business? If so, how many hours do they work each week, what is their job description, how much are they paid and will they continue to work after the sale of the business closes?
Do all the customers come into the business or do some customers buy online?
Who prepares the monthly financial statements? How are the documents prepared? Are all sales reported?
Who prepares the payroll for the business? How often are the employees paid? How do the employees report the hours they work?
Has the business had any previous lawsuits and if so, what were they? Are there any pending lawsuits? If so what are they?

There are many other initial questions to ask a business seller if you are a buyer looking to buy a business. This is the first article in this series and will include more articles.

If you would like more information about buying a business please visit my webpage Buy a business or buy a copy of my book Successfully buy your business.

For more immediate help with buying a business you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.

The post Questions to ask when buying a business appeared first on Rogerson Business Services.