There are a lot of things to consider when you are considering buying a business, so when you go to view a business it is important to get some of your questions answered by the seller themselves.
Here are a few questions you should ask:
- Why are you selling? There may be a genuine answer to this such as family commitments or retirement or is it because the business is failing?
- Can I see your financial accounts for the past three years? The financial statements can help you forecast for the future and you can determine if the business will be viable. Normally a business broker will assist this part.
- Is there a hand over period? It could be beneficial for you to learn the ropes of the business from the one person who knows it the best.
- Is there any training needs (on your behalf)? Are you skilled enough to jump right in or do you need training (the hand over period could come in handy here).
- Who are your biggest competitors? Getting an idea of the competitors in the area can help you get a feel for the market and whether you can improve the business further.
- What is the stock level? For some businesses such as Retail or Food based businesses, stock will be valued at cost price which you will have to pay the seller. If there is a high amount of stock, have you considered the costs involved?
- What is the current condition of equipment? You may think you’re getting a lot of equipment with the business, but without knowledge of the condition of the equipment its difficult to tell if this is a benefit.
These are only a few starter questions so make sure you think of some questions before you go to the viewing – this will be the best time to ask the seller your most important queries.