10 Questions for Sellers
“Selling a business? Be prepared to answer these 10 questions for sellers.”
Why are you selling the business?
The two most common reasons for selling a business – retirement and other business interests. If your motivation for selling is because of something negative, be upfront with your sellers. An attempt to camouflage an issue initially creates doubt later on in the relationship.
Is The Business a good fit for the Buyer?
People like to buy but they don’t want to be sold. The only person who can determine a good fit is the buyer. Be ready and willing to supply information but refrain from pitching your business.
Is the Business Profitable?
The tax returns are the basis for proving the profitability. It is very common for small business owners to minimize their tax liabilities using create accounting methods. Your tax returns will be normalized or recasted to show the true potential cash flow.
What Is Its Position in the Market?
Does the business serve a niche market? What differentiates your business from your competition? Are there areas of opportunity? Buyers base the value on past performance but are looking for areas to improve and gain market share.
Is It Priced Right?
How did you determine the asking price? A business valuation will give you a stable answer and reduce the time of negotiations. Like a home, a business will eventually generate a negative stigma if it’s on the market for an extended amount of time.
Is Your Business Staffed with Experienced Employees?
A business that is able to operate without the owner’s involvement is going to generate a greater response. Many buyers are in search for opportunities that can be absentee operated.
Does Your Business Have an Established Customer Base?
Your customer base is extremely important. When the current owner leaves, will the customer base continue to buy from the business? This is especially important if you have a concentrated customer base.
Can The Business Be Financed?
Most ownership transfers involve some type of financing. Business acquisitions loans require a small portion of seller finance. Seller financing is becoming more of a reality in finding a buyer and getting the best price.
Will the Lease Be Assigned?
If the business relies heavily upon its location, the landlord’s blessing to transfer the lease can be a critical factor. Know the required conditions for a new owner before advertising the opportunity.
Are Their Hidden Complications?
Buyers are skeptics. They have good reason to be skeptical. Be prepared to address any potential skeletons in the closet. These sorts of issues will include legal liabilities, unclear financials, labor relations issues, a history of poor customer service, or some liability that affect the sale of the business.
Be prepared to ask these 10 Questions for Sellers. Learn more about selling a business How the process works
Chris Kerth begins the sales process with a Free, No-Obligation Market Analysis. We only get paid when the deal closes.
Let Chris Kerth with Murphy Business sell your Business.