5 Questions to Ask During the In-Person Visit (+3 bonus questions!)

I can’t tell you how many times I’ve heard first-time business buyers tell me that they were shocked that they didn’t get to look at more financial and business information before they were expected to make an offer.

On the one hand, I certainly take their point. It’s true that the financial information you get is pretty limited. This can be made even worse if the financial statements and recasts weren’t professionally prepared.

But, remember, a business is so much more than its P&L Statement and balance sheet. You’ve got to consider employees and competition and marketing and suppliers and “location, location, location.”

This is information that isn’t included on any tax return or financial document. In order learn about these facets of a business, sometimes you have to generate information for yourself.

Value of Personal Interaction

One of the best ways to elicit and generate additional information about the business you want to buy is through well-crafted questions during the in-person visit. Many buyers approach the in-person visit as just a tour of the business, but with a few simple questions you can learn tremendously vital information about a business and its operations and systems—information you won’t find anywhere else.

Moreover, the face-to-face nature of this conversation gives you a unique opportunity to build trust and rapport with the seller. Even a short in-person conversation can be more valuable and productive than multiple telephone calls or written communications.

Face to Face, Not In Your Face

Buyers often struggle to know what questions to ask a seller during the in-person visit. Asking the wrong types or too many questions risks you coming across as imposing or aggressive, which could make the seller defensive. But, asking bland or trivial questions risks getting bland or trivial information and wasting your limited amount of time with the business owner.

So, start off small. Don’t come out of the gate swinging; get to know the owner a little bit before you start in with the earnest questions.

Here are 5 questions you should be sure to ask the seller:

1. Why are you selling? This might seem like a worthless question, but it’s important to understand the seller’s motivation. A seller who’s burnt out, may have been phoning it in for months or even years. It’s also a good question to gauge how forthcoming the seller will be in your follow up questions.
2. What do you plan to do after you sell? You can show genuine interest in the seller and also find out whether the reason they gave for selling holds any water. Retirement is a huge step for most people, and it’s something they plan out well in advance. This question is especially important if the seller seems a bit young to be “retiring.”
3. What do you like the most and the least about the business? Remember, these questions should also delve into what you can expect your day-to-day life to be like after you’ve taken over ownership.
4. Who are your most important employees? The owner is far and away the most qualified person to ask about the employees. Listen to how the owner talks about the key employees. The description will give you a sense of the relationship between the seller and the key employees and the seller’s management style.
5. Do you have any growth plans in place right now? Knowing if the seller was continuing to work in and work on the business all the way up to the sale is important information from your perspective. It suggests he hasn’t been letting the business operation slack just because he’s planning to sell. It also means that when you take over, the business could be on an upswing in productivity.

Finally, there are three bonus questions I always suggest my clients ask a seller:

1. If you weren’t selling, what would you do to improve the business in the next 6–9 months?
2. How much do you think that improvement would cost?
3. What stopped you from making that improvement 6–9 months ago?

This is a good series of questions to reveal the current management status and your future potential for growth.

Carpe the Opportunity!

If you choose to move forward with the purchase and make a written offer, the time will come later for a deep dive into the nitty-gritty of the business’ financial and tax documents. But before you spend the time and money to do that, you want to gather as much information about the business as you can.

Again, the in-person visit is not just a tour of the business. It’s a critical time for you to ask questions and elicit information from the one person who knows the business better than anyone else. Don’t waste the opportunity to have a one-on-one conversation with the seller.