Potential Buyers often take time to do a bit of research, review all information you provide and ask some important questions. This is part of the selling process and you should prepare for these questions.
Often the first question that comes up. There are a couple of reasons. It is an ice-breaker. It get's a conversation started. It tends to get the seller to talk about personal issues with the Business being sold. It can catch you unaware and cause a fumble! So, Why are you Selling your Business? Be honest, it's ok to tell the truth. Have you reached an age, where you are bored.. seeking something new? Are you ready to retire and relax in the mountains? Are you tired of employees and the business side of things? Is the business making little or no money? Whatever your reason, be straight and honest.
What is the Background and History of your Business?
Again, a great ice-breaker and an opportunity to share the passion of the Business and your passion for it. A viable business often has a story and is often the cause for customers and sales. This is an opportunity to share how the Business positioned itself in the beginning, how it operated and how it is positioned for the future. It's also a good opportunity to share what you'd do different, if you stay in the business for a few more years. This data let's a potential buyer know what they should consider changing or doing, from your point of view.
Where does the Revenue come from?
Serious buyers will get into the numbers and ask a lot of questions. Your Income Statement, P&L and Owner's Benefits. The buyer wants to know how they will generate revenue, where it comes from, how it stacks up against expenses and what's in it for them! It's not uncommon for a Small Business to include an Owner's Draw, annual Country Club Membership, annual Zoo Membership, Cell Phone, even a Leased Car. All of these should be spelled out as Owner's Benefits, as they are not directly necessary expenses for the ongoing operations of the business... except for they provide the Owner to exist!
Many more questions will be asked. Most important is to be honest. Before these calls come in, take time to write down some notes about your business. The simple activity of writing them down is a great memory-jogger and helps you to be prepared and comfortable for the questions to come.
Author: Scott H Leonard, Founder BizLocal