Top Questions To Ask When Buying A Business - Crucial Tips For Buyers
Performing due diligence when buying a business is critical to ensuring that you are making the right decision with one of the biggest purchases of your life. When examining a business that you are interested in purchasing, must make sure that you learn and understand everything there is to know about that business before you buy it.
The best way to learn about a business is to ask as many straightforward questions as you can during the due diligence process. As you meet with the buyer and their team of professionals, take your time to ask questions regarding all aspects of the business, particularly those that may not be found in the documents you will be examining.
Some questions to ask include:
* What are your expectations of the future buyer of your business?
* What does your ideal transition out of the business look like? Are you willing to train, mentor, or assist me during that transition?
* How did you get your start in this business and what excites you about going to work every day?
* What is your current role in the business and what does a typical day look like?
* What solutions does your company provide for your customers? How do you distinguish yourself from your competition to keep your customers doing business with you?
* What does your company’s leadership team look like and what do their roles within the company look like?
* How long have your employees worked with/for you? Why have the longest tenured employees stayed with you?
* What does the service/production process look like, from sourcing to distributing to serving your customers?
* What problems arise in your business, both internally and externally? Who handles these situations and how do they get resolved?
* What capital expenditures should be made annually, and on what specifically?
* What mistakes have been made while running this business that I should be aware of? How can these mistakes be avoided?
* How is the sale of your business going to impact business relationships with customers and suppliers?
* What resources did you utilize to find and maintain success in your business? Will those resources be made available to me as the new business owner?
As your team of professionals spend their time analyzing documents and critical information pertaining to the business, you should be developing a list of thoughtful questions you want answered in order to make an informed decision on whether or not to go through with your business purchase. The more you learn, the better you will feel about committing to a life changing purchase, should the answers appeal to you. Leave no stone unturned!