by Andrew Cagnetta, CEO of Transworld Business Advisors
If you are seriously considering purchasing a business then you need to make sure you have as much information as possible before the final purchase.
Asking these vital questions can help you determine not only if it’s the right time to purchase, but if the business is right for you:
1. Tell me about the business.
This question provides a great opportunity for you to sit back and listen. Hearing about the business from the owner’s perspective can reveal what they deemed successful and unsuccessful. You can figure out which leadership style they used and whether or not yours could be as successful. In addition, you can discover the personality of the company and whether or not you could see yourself fitting in well.
2. Why are you selling the business now?
Timing is an important consideration. Learning why the owner is selling now may provide valuable insight into challenges the company is currently facing. You can also find out whether the company is being sold for personal issues or because the business itself is too much to handle. Knowing this information before you sign on can let you know exactly what you are getting into.
3. What is it like working in this industry?
When you start working as the owner, you want to demonstrate your capability and dedication to the company. Asking this question can help you figure out how to tailor your strategy and plan your initial steps based on industry requirements and traditions. This question can also help you determine if you would enjoy working in this specific industry based on its characteristics and needs.
4. Can we review business documentation?
You want to ensure that the business checks out, which can best be achieved by looking over the numbers. You can get a firsthand look of what the company did that was successful and what may need some additional attention. You want to see what the company has done to document their history so you can use it as a reference. You also want to discover if the documentation is thorough.
5. If you had unlimited resources, how would you change things?
This question can once again reveal opportunities that the company can take advantage of once you start working as the owner. Maybe the owner didn’t have enough time to finish developing a profitable plan or maybe there wasn’t enough budget to start a new project. These untouched or unfinished items can assist you in adjusting your plans appropriately..
6. How many hours a week do you typically work?
This question serves as an indicator of your fit with the company. If you prefer having more family time and not spending most of your hours in the office, then discovering that the company expects you to work lengthy hours can be a strong indicator that this company isn’t the best fit for you. If you are a fan of working from home, you may also want to ask if these hours are all in-office.
7. How often do you get called in when you aren’t working?
Once again, this question will help you determine if you could see yourself enjoying your work as the owner of the company. If you don’t mind getting called in every now and then you may be more lenient with the answer you hear. In contrast, knowing that you will most likely get called in on a day-to-day may be a major turn-off and let you know to reconsider this business.
When you speak with the business owner and are prepared with these questions then you can be sure that the owner will be aware of your genuine interest. You can also ask more company or industry-specific questions that will help you visualize yourself making this company thrive.
Andrew Cagnetta is the CEO of Transworld Business Advisors. Andy enjoys helping business owners/buyers realize the American Dream through business brokerage and franchise consulting and development. Transworld Business Advisors, LLC, is a worldwide franchise leader in business brokerage, franchise consulting and franchise development.