Finding a Business to Buy- Review & Seller Meetings

To continue on from 2 posts ago, once you have gathered all of the information possible from the broker or a seller in a FSBO situation, It's time to review the information and put together viable questions to ask the seller.

So, once you have the vital information you need you must really review it. This is the time to ask questions. However, it is not the time to start negotiating.

If you are getting into a business that you are not very familiar with regarding the technical aspects, get some help with good questions to ask. Believe it or not, asking irrelevant questions will not be received kindly by either the Seller or the Broker representing the listing.

There is nothing wrong with going into a fairly unfamiliar business, but asking the right questions with help from a Business Advisor or Broker will become essential in this type of circumstance.

Asking nothing at all, whether you know the industry or not, is also not a good idea.

When you have done your review and things still look interesting, this is the time to request a viewing of the business and/or a meeting with the Seller.

A meeting with the Seller will not be made to negotiate price when dealing with a Broker. This is neither the time nor the place. Doing this separately with the Broker in the middle of the Seller and you is crucial. Most smart Brokers will also have you conduct a visit as a customer in situations such as in a retail business before allowing a Broker-mediated meeting with the Seller.

If a Broker is not involved, this meeting will probably end up being the start of negotiations between you and the Seller. But I do not recommend it if avoidable. Take the additional information you have now that you have seen the business and review it again along with the previous information you received. Do this after the meeting without the Seller present.

Again, it often ends up not being pretty when negotiating directly with the Seller unless you are going to offer very close to the asking price. This is why I do not recommend dealing with FSBO businesses.

At this point you should be in a position to make a preliminary valuation of the business and an offer. More on that in another post.


To Your Business Buying Success-

The Business Buying Guru