Buyers Ask Sellers Questions selling a business explained by bizology business brokers

Serious buyers will ask sellers very serious questions. We need to be prepared. This list is just a guide to get you thinking of looking at your business through a buyer's eyes. cb
1) Can your customers avoid using your product or service by obtaining it from another source?
2) What kind of competition exists in your marketplace?
3) Is the competition a new aspect in the marketplace or has it been there long enough for you to recognize and understand its impact on your business?
4) Do you consider the competition a healthy factor (does it broaden the product or service visibility)?
5) How will you explain the value of your business’s competition to potential buyers?
6) Is there room in the marketplace for additional competition, and will it substantially affect your business in a positive or negative fashion?
7) Is there a niche that you or your buyer can create that will minimize the impact of additional or existing competition?
8) Is there any equipment or inventory source that would give your business a better competitive advantage? Be able to describe it and how it could be acquired; or how and why you know you are as competitive as possible.
Location lease
1) Explain the appropriateness of your location to the business’s future growth.
2) Explain the appropriateness of your lease with regard to the cost, term & options, parking, exclusivity or non, space and expansion
3) How important is your location to your customers?
4) If you were to remain and money was not an issue, what would you change about your location? The business?
Growth Potential
1) Describe how changes in the following scenarios might affect your business’s growth potential.
2) Customer needs & tastes.
3) Acquisition of a competitor.
4) New equipment or concepts on the horizon.
5) New products or services on the horizon.
6) Competing franchise that is not in your service area at present?
7) How much does your average customer spend with you per purchase?
8) What is the quality and quantity of the items purchased?
9) If possible, assess how much time per dollar purchased, you or your staff spends with each customer.
10) What is the ratio of inventory on hand to gross sales? Where could it be improved for more profit?
Franchise Alternative
(You are not a franchise)
1) What franchise facilities or advantages, if any, could you avail yourself of?
2) Do these advantages supplement your own capabilities or duplicated them?
3) In your business, what buying advantages if any exist in a franchise relationship?
4) How significant are franchises as competitors in your industry.
(You are a franchise)
1) What services does your franchiser provide and how valuable are they?
2) How much would it cost to obtain those services without the franchise?
3) Describe the experience of being part of a franchise family and its value to you as an entrepreneur.
4) What are your royalties, franchise fees, advertising and territory. Minimum and maximums.
5) When does your franchise agreement expire and what is the cost of renewal?
6) Will there be new build out requirements to renew the franchise agreement?
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