Buyers are typically the ones asking most of the questions during the acquisition process, but it’s just as important for the seller to ask questions about the buyer. It’s wise for sellers to determine the buyer’s acumen, character and experience in advance to avoid surprises and limit risks following the sale.
Some of the questions below may be appropriate to ask during the selling process. You’ll need to tailor them to your specific situation and to the type of buyer involved.
Questions for a Potential Buyer:
- How long have you been looking for a business?
- Tell me about yourself and how you got to where you are today.
- What is your leadership style?
- What are your long-term goals for the business?
- Why do you think my company might be a good acquisition target?
- Have you looked at any other businesses like mine?
- How do you typically value a business like mine?
- How long do you anticipate keeping the business?
- Tell me how will you finance an acquisition?
- Do you have a fund?
- Do you have a sufficient amount of cash on hand to complete a transaction? How much?
- Where does your investment capital come from?
- Who else is involved in your ownership group?
- Are you willing to personally guarantee any seller notes? (To discuss after LOI)
- Tell me about the size and profitability of your current company.
- Would you consider me retaining some ownership?
- How do you see the post-closing integration process happening?
- How long would you want me to continue working?
- What would my role look like after the acquisition?
- Do you anticipate eliminating any positions within my company?
- Will you be moving any positions or the business in the next few years?
- Other than financial resources, what other resources/expertise will you bring to the company?
- Would you object to me requesting a background check on you?
- Have you made any other transactions in the past?
- May I speak with an owner of one of the businesses you’ve acquired in the past?
- What type of culture are you looking for with an acquisition?
- What is your acquisition process and how long do you anticipate it taking?
- Will you be making additional acquisitions in our industry after closing?
- What are your biggest concerns in acquiring my company?
Getting to know the buyer and their team during the selling process is essential to a successful transition. Often, sellers are reluctant or uncomfortable asking difficult questions of potential buyers, but it is imperative that you establish a good relationship and understanding with a buyer if you intend to work together for months or years after the sale.
O&O will guide you with the appropriate timing and questions to ensure you are comfortable proceeding with a buyer. We’re happy to serve as a liaison to get the answers you need to complete a transaction. Contact or Call us at 913-648-0185.