Buying a business isn’t quite the same as buying a house, a car, or a piece of furniture. With physical commodities, it is much easier to see what you’re getting. Businesses tend to hide their flaws well and flaunt their best features, so to speak, and you will want to find out as much as possible about their financials, but these questions will provide important insight about the quality of the opportunity itself.
So, once you’ve found a few listings in a Businesses FSBO Directory and you are seriously considering the purchase of a business, take the time to ask the right questions. Then, do yourself a favor and be a good listener.
Question 1: Who are your biggest competitors?
Knowing the company’s adversaries will tell you a lot about where they stand in the marketplace. First and foremost, it will tell you how savvy the business owner really is. Does he or she know who his competitors really are? By listening to the answer here, you will gain quite a bit of understanding about the business and where their real opportunity lies, if any.
Question 2: Why are you selling?
Politely asking the seller why they’re selling is a legitimate question. Whether it is retirement, divorce, health issues or something else, it will indicate how motivated the seller is and could impact your how much you should offer.
Question 3: What are the trends in your industry and what can I do to take advantage of them?
This is another one of those questions that will reveal how savvy the seller really is. It will also help you assess how much unclaimed market share there may be if you are willing to put time into it. Here is another one of those times to listen closely for clues about this businesses’ potential. Sometimes the owner is sophisticated enough to recognize potential areas of expansion but lacks the resources or capital to jump on them. However, if the capital to take advantage of new opportunities is within your reach, then you may have just found your new business.
Before you start looking for a business to buy, make sure you are working directly with the seller. This will save you from dealing with brokers who often know very little about the businesses they sell. One way of doing this is by using a “Businesses for Sale by Owner Directory”, also known as an Business FSBO directory.