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20 Questions Prospective Buyers Ask

by | January 11, 2023 | Merger and Acquisitions, M&A, M&A Education & Market, Strategic Advisory

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How Does Your Company Rate? 

20 Questions Prospective Buyers Ask

Before you put your business up for sale, you need to be prepared to evaluate its status from a number of different perspectives besides your own.

Much of what you know about your own company is from your own experience, looking back over what you have accomplished. After all, it has consumed your time, your energy, your passion, and who knows what else for who knows how long!

Your buyer, on the other hand, is looking at your company from a completely different perspective: looking forward, what will this company do for them? With this in mind, prospective buyers are going to want to conduct a careful examination of all aspects of your business, both negatively and positively. 

Every business is unique, with its own risk factors and opportunities. Your prospective buyer’s goal is to be able to structure a deal in their own best interests that will maximize the upsides and minimize the downsides of your company. To accomplish this, the buyer will want to ask questions—lots of questions—about how your business operates. You’ll want to respond honestly, with an aim to inform, not impress.  If you try to oversell it, they will no doubt find out in due time through due diligence. 

You can be prepared in advance for the kinds of questions they’re going to ask.  Whether buyers’ considerations are financial or strategic, most have a set of gating questions they want to know about a company, before even considering it for an acquisition.

Here are the top 20 topics on a buyers’ mind (read through to the end and then take our quiz to see how your company stacks up!):

  • Profits 
  • Revenue growth
  • Stability
  • Market share in your niche
  • Customer retention
  • Customer concentration
  • Competition
  • Overhead and expense controls and budget history
  • Product/market obsolescence
  • Cap-ex
  • Capital Efficiency
  • Management team strength
  • Regulatory environment
  • Environmental risks
  • Maintenance of IP
  • Social or cultural issues
  • Planning Processes
  • Corporate governance
  • Operating and financial metrics
  • Dealing with technological change

Now, if you want to see if you would make it to the next level of serious buyer interest, take our quiz and get your score

We’d be happy to discuss your results with you. Reach out to discuss the best path for your company to grow and for you to build generational wealth through the recapitalization or sale of your private company. 253-370-8893 | Craig.Dickens@JDMerit.com | @MandAexit.

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