The purpose of this section is to help you understand your buyer and what it is they are looking for. Always try and put yourself in their shoes. Answer these questions to the satisfaction of the buyer and you’ll have a higher selling price and a deal that will typically go the distance.
- Why do you want to sell?
NOTE: It’s always a bit suspect if you are making over $100k per year and you only work 10 hours a week. You need to really think about this question and have a very solid answer. If you’re 40 years old and you tell the buyer you want to retire, you’re probably not going to come off too convincing.
- How stable are the key employees and will there be any issues with a change of ownership? How bad would the company suffer without some of your key employees?
- Where do you see the market going in the next 5 to 10 years and what do you see as expansion options?
- Do you know of any recent market changes that have or will change the marketability/viability of the company? NOTE: Be very careful on how you answer this one.
- How many active accounts do you have and how many constitute your top 10%? If I buy the company do you feel I can retain your primary accounts?
Also asked quite frequently:
Do you need any licenses to operate the company?
Are the income statements reflective of just THIS business?
What is your typical day like?
If you had an extra $100,000 in capital to use anyway you wished in the business how would you spend it?
What are the current (and future) conditions in the market concerning: competition, environmental, governmental, etc.?
What does your company do really well?
Do you have any family working in the business and do they show up in wages on the income statement?
Do your wages show up in the income statements?