What sellers want to know about buyers

If you’re ready to get in contact with a seller and take the next step on your business buying journey, you’ll want to be prepared. If you want to remain front-of-mind for the seller and stand out from the crowd, you need to make sure you have good answers for any screening questions they may have.

Here are our key insights into what sellers will want to know about you, so you make a good first impression.

 

Your finances

For a seller, all the good intentions in the world are meaningless if you don’t have the money to buy their business. That’s why any good seller will ask you to confirm you have access to adequate funds. They may even ask you for proof.

If you have confirmation your lender will lend you a certain amount, have it documented and ready to show the seller.

Make sure you have a plan, and you’re ready to talk about it. If you don’t, a busy seller may write you off as a time-waster who can’t follow through on their interest.

Questions might include:

• How do you plan to fund the purchase?
• What evidence do you have that you can afford the asking price, or a similar amount?

 

Your background

When you purchase a business, you’re usually buying the product of a lot of blood, sweat, and tears. Even if you can afford the asking price, a seller will want to know you have the right experience, skills or passion to keep the business going.

For this reason, expect the seller to ask about your previous roles, other businesses you’ve owned, and what transferable skills you have.

Try to prepare honest, insightful answers to the questions below. That’ll help you build trust with the seller from the get-go.

Questions might include:

• What’s your professional background?
• Have you ever owned a business before? Was it successful?
• What skills do you think you have that would make you a good fit for this business?

 

Your intentions

Sellers will probably want to know your intentions for the same reason they want to know your background. They’ve likely spent a great deal of time and energy on the business, and they don’t want to hand it over to someone who doesn’t have its best interests at heart.

If the business has employees, this is particularly true. The seller likely has close bonds with the existing staff, and will want to ensure they’ll be looked after.

In addition, they’ll want you to demonstrate some vision, or drive that will move the business forward. Put simply, they’ll be looking for further evidence that you’re a safe pair of hands.

Plan ahead by brainstorming some ideas about where you could take the business, what your plans are for it, and how you’ll deal with the current staff.

Questions might include:

• What visions do you have for this business?
• What is your plan for existing staff?
• How long will you look to hold onto this business?

 

The curly questions

To find their perfect buyer, sellers want to weed out time wasters, and people who aren’t a good fit.

Expect some legal questions to check your bona-fides, and possibly a request to sign an NDA (non-disclosure agreement) before they show you any sensitive information.

In addition, they may also ask you how much help you’re looking for during the handover. Many sellers will agree to stay on for a while to help you learn the ropes, while others might not be so keen. So don’t be surprised if they query how much help you’ll need as the business changes hands.

Essentially these questions help sellers narrow down their list and work out whether you’re a legitimate, trustworthy person.

Questions might include:

• Are you willing to sign an NDA?
• Do you have any judgements or bankruptcies against you?
• Do you have the relevant licences required to run the business? (eg working with children check, heavy vehicle licence).
• Would you expect me to stay on for a transition period?

 

Make it count when you make contact

It pays to remember the business sales process is a two-way street. The initial contact stage is a time to learn more about each other and the business…that includes any questions or queries you have for the seller. Learn more about questions you should ask here.

If you do the legwork before you talk to a seller, you’re more likely to get useful information you can use to decide if you want to take your interest further. In addition, you’ll come across as professional and trustworthy. And if a seller trusts you, they’re more likely to want to progress further through the sales process with you. That will help you achieve your goal of becoming a fully-fledged business owner.