As a businessman, you might find yourself in a need some time to purchase an already-existing business. Most of the time, it could be a profitable opportunity that gives you a chance for building a business that has already set its roots or even help to save a business that might not be doing so great.
However, buying a business is a huge decision and you need to examine everything thoroughly before you even think about buying it.
Knowing what kind of questions you need to ask while buying a business would set you off and help you pay the right kind of price for the business you are interested in. It also means that if you have any kind of questions regarding the working of the business, it could be done in the same process.
One of the most important things to consider while buying a business is to understand if the business is worth the asking price. Buying a business is a great deal and you need to have the right kind of questions for the same.
So, let us walk you through some of the questions which you need to ask before you buy a business.
Regarding the business
- Why is your business for sale in the first place?
- Could you tell me about the history of your business and the key management of how your business runs?
- What goals did you have with your business and were you able to achieve them?
- What is the financial situation of the company? How could we improve that?
- Does the company have any debts as of now?
- Does your company have enough working capital?
- How is the relationship of the company with the bank?
- What is your target market for the business and is the market growing or shrinking?
- Does the company have any shares?
- Is the business heavily dependent on a few key customers?
- How much market share does the company have?
- Who are the primary competitors of the company?
Sales and Marketing related questions
- What are the sales channels which the business uses and what are the most effective?
- What are the marketing methods which your business uses?
- Could you mention the sales history for the past few years?
- How do you think your sales could raise?
Assets related questions
- Does your company own any of the intellectual properties or any of the exclusive products? In case it does, are those transferrable?
- Does your company own any of the locations for conducting the business?
- What is the reputation of your company?
- Does your company have strong brand recognition in the market?
- What type of insurance policies does your company have?
Suppliers related questions
- Who are the suppliers of your company and are they willing to transfer their contracts to the new owner?
- What is the inventory which you have and how do you maintain it?
- Does your company have multiple suppliers or just a single one?