- Know why your potential buyer is interested
- Learn about their business experience
- Understand what their long term goals are with your business and any changes they might expect to make
5 Questions to Ask Potential Business Buyers
You want to sell your business fast. Perhaps you want to try something else. Or, you’re ready to let it go because there’s a beach chair on a tropical island calling your name.
No matter the reason, you want to move the sale forward sooner than later. In doing so, you want to weed out the interested prospects from those who’re just looking. In addition, you need to ensure the prospect will not gut what you built. To get the right person to be the new owner, here are 5 questions to ask potential business buyers.
Why are you interested in my company?
Before you find out about their team or their background, you need to ask this question. It’s going to determine the rest of the conversation. If their answer is brief or doesn’t make any sense, then it may be a short chat. However, if they provide an efficient elevator pitch that defines their goals, then there’s every reason to proceed with the next set of queries.
What is your background?
Another of the questions to ask potential business buyers is about their past experience. However, don’t give them the short-shrift if they’ve never owned a company. Remember, you were once a novice at this, so you need to put yourself in their shoes. In fact, a new business owner may be better than a seasoned one, as they’ll have fresher ideas to make it profitable.
That’s not to say a well-rounded professional should be dismissed. Particularly if they’ve run successful businesses similar to yours. Selling to this type of individual or organization provides a sense of assurance the company you worked hard to build will be in good hands.
What are your long-term goals for the business?
First, “I dunno,” is not a good answer, particularly when it’s followed by silence. Another answer you might want to reject involves breaking the business apart and selling its assets to enhance their existing organization. Not only is this a stab at the work you put into the business but also affects your employees.
At a minimum, the prospective buyers should have a 30,000-foot view of their goals. Should a second round of talks be necessary, you can ask them to provide a detailed plan on how they are going to increase revenue, improve technology, and increase the well-being of your employees.
What is the biggest challenge your company faces?
No sugar-coating here. An answer of, “Not a thing,” brings the interview to an end. Every company has a challenge. That’s the beauty and the pain of being a business owner. Without these challenges, one can’t learn lessons so they aren’t repeated.
Regardless what it is, they need to tell you about these challenges. While they may seem monumental to them, you may find them trivial problems that are easily solved. It’s how the perspective buyer sees and acts upon them that determines if they’re a good candidate.
What do you intend to keep or get rid of?
This is the hardest thing for you to hear, yet, it also offers a sense of the buyer’s goals. Face it, no one wants to hear how they are going to lay off workers because their responsibilities duplicate something the buyer already has. Nevertheless, having them tell you at the start instead of holding back until signing creates a proper level of trust.
If they say nothing will change, then financial and other material are required for review. This is the best way to determine the company’s long-term goals and how your business fits into them. A total liquidation of the business where only the physical or intellectual products are kept is not something that should be considered. Even if you’re desperate to sell the business.
Of course, there are many more questions to ask. These will come up as the sales process goes through. In the end, stay calm throughout these steps. If you do, and if you have the right questions to ask potential business buyers, you’ll find the prospect who will take your business to the next levels of success.
If you have any questions about how to sell your business to a competitor, please feel free to contact us.