When buying a business, key questions to ask include: Financial questions:
- What are the annual gross revenue, ongoing costs, and profit margins?
- Can I review financial statements, tax returns, and audits from the past 3-5 years?
- Are there any debts or liabilities? How are they managed?
Ownership and legal questions:
- Why is the owner selling the business?
- Are there any outstanding or past lawsuits or legal issues?
- Are there zoning or legal restrictions affecting the business?
- Who are the owners and investors? Are all shares for sale?
Operational questions:
- What assets, intellectual property, and equipment are included?
- Does the business have licenses, permits, and insurance?
- How many employees are there? Who are key staff? Will they stay?
- What suppliers and contracts does the business have?
- What is the customer base and reputation?
Growth potential questions:
- Does the business have potential for growth or hypergrowth?
- How dependent is the business on the current owner?
- What is the marketing strategy and competitive landscape?
These questions help evaluate the business's financial health, operational status, legal considerations, and growth prospects before buying.
