Contacting a business seller for the first time

You’ve found a business you like the look of, and you’re curious to know more about it…so you just get in touch with the owner, right?

If you’re cautious about making contact, that’s understandable. It’s natural to feel nervous about talking to someone for the first time, especially when it could lead to a big decision. But follow this rough guide, and you’ll learn how to ask all the important questions without committing to something you’re not ready for.

Here’s what you need to know about making contact, and making it count.

Remember: it’s only an enquiry

Think of this first step like visiting an open home. You want to get a feel for what’s on offer, figure out if it’s within your budget, and uncover any major issues you want to steer clear of. You’re not committing to anything, just checking out an opportunity that could lead to a purchase further down the track.

Just like looking for a home, it pays to check out a few so you have a good idea of what’s out there. Setting up a SEEK Business profile can help, ensuring business listings that match your criteria are delivered straight to your inbox. It will also help you understand what business sellers are expecting in your chosen industry.

If you’ve found a business you like, the quickest and easiest way to get in touch is via the form on the SEEK Business ad. This enables you to send them a direct message via the listing.

If you’re a confident talker and there’s a number listed, feel free to give them a call. Just remember to write your questions down so you get all the information you need.

Questions to ask

There’s a few key things you should try to find out right at the start. Above all, you want to get an idea what the business ‘feels’ like, whether the asking price is worth it, and what life might be like as the owner.

But this is just your first contact, so don’t expect sellers to provide detailed or confidential information from the get-go. They’ll want to gauge if you’re a serious buyer, and it’s likely you’ll need to sign a non-disclosure agreement before you see any financials.

If you’re enquiring about an independent business or through a broker, you’ll want to know:

• Why are they selling? Maybe the seller’s retiring. Maybe the business is facing problems (which might be an opportunity!). Ask follow up questions, and trust your gut.
• How long have they owned it? Longevity gives you insight into prospects for future success. Ask if there have been other owners so you can get a full view of where the business has come from.
• What do they think it takes to run the business successfully? This may help you work out what’ll be expected if you decide to proceed, and whether it’s the right business for you.
• How much time do they spend in the business? It’s worth finding out how many hours the current owner charts each week, to see what you could be signing up for.
• What are the biggest challenges? A good owner will be frank about what’s happening in the current market, and how they’ve dealt with competition or economic conditions. If their answers sound too good to be true, they probably are.
• How did they arrive at the asking price? Get insight into what the seller values and what the business is worth to them. If you decide to progress you should check the numbers yourself, and analyse detailed financials during your due diligence.

Check out our full list of questions to ask independent business sellers here.

If you enquire about a franchise it’s likely they’ll send an information pack once you make a digital enquiry onsite. This may give you some answers to your initial questions along with some helpful next steps. Info packs are usually followed up with a call or another email from the franchisor, so have any additional questions on hand.

A few things you might want to ask a franchisor are:

• What does it take to run the franchise effectively? Franchisors will have a good idea what they’re looking for. This is your chance to see if you’re a good fit for their system.
• How many hours a week do you need to work in the business? Again, franchisors want good franchisees, so they should be clear about how much time you’ll need to dedicate to the business.
• What are the ongoing costs and what is the typical payback period? While there may not be exact numbers, franchisors should be open with these figures.
• What’s the training and ongoing support? Understand what you’ll get for the fees you pay, and how things run within the franchise system. You should feel comfortable with the level of support that’d be available to you.
• What are the long-term plans for the future? A growing franchise system increases the franchisor’s name and brand recognition. But growth alone doesn’t mean success. Find out what their goals are, so you know what you’re getting into.

For a more comprehensive list of questions to ask a franchisor, read the article here.

Now you know the questions to ask, it’s time to put your best foot forward and write your enquiry. A good way to think of it is like applying for a job. Sellers can sometimes receive dozens of enquiries, so you want to make sure yours stands out from the crowd.

Before you hit send:

• Proofread – sellers want to know you’re genuinely interested in their business. Poor spelling and grammar suggests the opposite, so make sure your enquiry is tidy and easy to understand.
• Check the time of day – sending emails at odd times makes it less likely a seller will open them. Send emails during work hours – 10am-midday is a sweet spot.
• Sell yourself – give the seller a quick introduction about you, including why you’re interested in the business and what skills you could bring. If there’s other potential buyers, you’ll want to make a good first impression.
• Be personable – if you want to do business with someone, it helps if they like you. Be friendly and positive in your initial correspondence, and you’ll start off on the right foot.

What you don’t need to ask yet

In this first enquiry, you don’t need to dig too deep. You can uncover the finer details down the line once you’ve worked out whether this business is one you want to learn more about. At this initial step you’re only trying to get an idea about what the business is like, how it’s performing, and what it might be like to own it. The real nitty gritty can come later if you’re still interested.

You’ve made an enquiry. What next?

Be aware you may not get a quick reply – especially if you’re dealing with an independent seller who’s probably still running the business day-to-day. If you’re reaching out to a broker or franchisor you may get a faster response, or even an automated message with some key details about next steps and what to expect. While you’re waiting for a seller to get in touch it’s a good opportunity to enquire with some other businesses to see what else is out there.

It’s not a contract, so get in contact

While it might be a little nerve-wracking, always remember that asking a business seller a few questions is just that. You’re not obliged to do anything with the information you get, and you’re certainly not committing to buy the business.

You might decide not to take your query any further, and that’s fine. But maybe, just maybe, it could be the next step in your rewarding business ownership journey.

Get started now and create a SEEK Business profile. When an opportunity matches your criteria we’ll let you know so you can reach out and see if this might be the business for you. Use the above information as a guide, and your next enquiry could be the most important one you ever make.