The questions to ask a seller before you make an offer
The financials tell you what a business earned. They don't tell you why, or whether it lasts. Here are the questions that separate a good buy from an expensive mistake.
The questions to ask a seller before you make an offer
By the time you’re ready to make an offer, you’ve read the financials. You know the revenue, the earnings, the trend. But the numbers only tell you what happened, not why, and not whether it holds after the current owner walks away. That’s what the right questions uncover, and it’s where a good buy separates from an expensive mistake.
These are the questions worth asking before you commit, grouped by what they protect you from.
About the earnings
The financials give you a number. These questions test whether it’s real.
- Can you show me the detail behind each add-back? A seller quoting strong earnings should be able to itemize every add-back with a receipt or a reason. If they can’t, don’t count it.
- What was the “one-time” expense, and can you prove it won’t repeat? A one-time cost that shows up every year isn’t one-time.
- Why did revenue move the way it did? Any sharp jump or drop needs a story. A new contract that’s since ended, a one-off project, a lost customer, you need to know which.
- Are you on cash or accrual accounting, and has anyone outside reviewed the books?
About the customers
A business is only as stable as who’s paying it.
- What share of revenue comes from your largest customer? If one customer is a big chunk, losing them after you buy could sink you. This is one of the most common ways small acquisitions go wrong.
- Can I see revenue by customer for the last three years, and how long have those relationships run?
- How much of your revenue is recurring versus one-off? Are any customers under written contract?
- How do new customers find you today?
That last one matters more than it sounds. If the answer is “they know me,” you have a problem, because you’re not buying you.
About the owner’s role
This is the question first-time buyers skip and later regret.
- What does a normal week look like for you in the business? You’re finding out whether you’re buying a business or buying yourself a job that depends on relationships and knowledge walking out the door.
- What happens to the business the day you leave? Who holds the key relationships, the technical knowledge, the vendor deals?
- How long will you stay on to hand things over, and are you willing to put that in writing?
- Is there anyone here who could run this without you, and are they staying?
About what transfers
The deal isn’t just the earnings. It’s everything that makes them possible.
- Are there licenses, permits, or certifications the business needs, and do they transfer to a new owner? Some don’t, and finding out after closing is a painful way to learn.
- Which supplier and vendor relationships are essential, and will they carry over to me?
- Are there leases, contracts, or agreements I’d be taking on? Any that end soon or renew on bad terms?
- Is any of this tied personally to you rather than to the business?
About the sale itself
The reasons behind the sale often tell you the most.
- Why are you selling now? Listen to the whole answer. Retirement, burnout, a genuine life change are ordinary. Vagueness or a story that keeps shifting is worth noticing.
- What would you do differently if you were staying and wanted to grow this?
- Would you consider carrying a seller note for part of the price? A seller willing to finance part of the deal is betting on the business after they’re gone, which tells you something. A seller who wants every dollar in cash and out the door tells you something too.
Why the questions matter as much as the numbers
You can run perfect math on a business and still buy a bad one, if the earnings depended on the owner, or one customer, or a relationship that doesn’t transfer. The financials are necessary and not sufficient. The questions are how you find out whether the number you’re paying for is a business or just a snapshot of one person’s last few years.
Ask them before you make an offer, not after. The answers change what the business is worth, and sometimes whether you want it at all.
Valtize reads a deal’s numbers and generates the specific questions to ask that seller, tied to what it finds: a customer that’s too concentrated, an add-back that needs proof, a margin that moved. The math and the questions, from one upload. Try it.