Question:

My wife and I are meeting next week with the seller and his broker of a business we are interested in, and we’?re trying to prepare a list of questions to ask. So far we are drawing a blank? The business seems to be fairly straightforward (it is a retail Floral and Gift shop) and they have already given us basic financial information for the past 12 months. What else should we be asking for? Also, what is the real goal for this meeting?

Answer:

This is a wonderful question. I am pleased to learn that you are going to prepare yourself properly for the meeting. While there are numerous questions to be asked, you will want to see how the meeting progresses in general. It may evolve into a productive conversation.

Here are a few of the questions to ask the seller:

• What do you do everyday?
• Do you anticipate any problems with me getting credit from your suppliers?
• Do any of your suppliers represent more than 10% of your purchases? If yes, who are they?
• Why are you selling?
• What is it that you like best and least about the business?
• What do you believe is the profile of the ideal buyer for this business?
• What can be done to build the business?
• How long will it take me to really learn this business?
• How long can I count on you to train me after the sale?
• What keeps you up at night about the business?
• Who does the buying for the store?
• What are the details of the lease? How long? Any options? Do you anticipate any problems with the landlord assigning it to me or entering into a new lease?
• How much vacation do you take (not that you?’re looking for time off,? rather, you want to know if they have adequate staff that will allow you time away.)
• Are you the only owner?
• Who are the employees? Any manager in place? Are there any employees that are critical to the business?
• Are you willing to finance part of the purchase? If not, why?

Your other point about what the real goal for this meeting is a very perceptive question/observation on your behalf. There are really three areas to focus on:

1. Answers and Research

You want to get enough answers and detail to your questions so you can immediately focus on researching the business, the industry, the competition, etc.

Although the Internet allows prospective business buyers to do phenomenal research and quickly, in today?’s environment, good businesses sell fast – very fast. As such, you may not have a lot of time between a seller meeting and preparing an offer. Obviously, you’?ll want to do your homework before moving to an offer so be sure to get enough information in your seller meeting to conduct your research. On this note, always ask the seller if he/she has copies of any trade publications. They’?re a great source for additional information.

2. Seeing Yourself In The Business

If you take away anything from a seller meeting, it should be the answers to these four questions:

• Do I like the business?
• Can I see myself running it?
• Do I like the seller?
• Do I trust them?

Questions 1 and 2 are obvious. Questions 3 and 4 are critical. If you like the seller and trust them, chances are you and they will be able to work through any and all of the deal challenges that will arise. Trust is also paramount. If not, you will always keep thinking they are hiding something.

I have been involved in hundreds of business sales and in my experience, when the buyer wants to buy, and the seller wants to sell, and the parties trust one another; you cannot stop them from getting a deal done.

3. Impress The Seller

If you have any chance of getting the seller to finance the deal, or bend more then they would normally on the deal terms, you need to leave them feeling that you’re the one to buy their business.

If they believe that you can not only get the deal done, but also run the business successfully, they will go out of their way to make the deal happen.

So there you have it: a series of key questions to ask the seller, and the key points to focus on as your goal when you meet them. Good luck!