Questions for the first seller call
You will not cover every question on one call. Pick the groups that matter most for this business, listen more than you talk and note anything to follow up in writing.
- Time needed
- About 45 minutes
- Last updated
- Author
- Loupe editorial
- Reviewer
- Not yet reviewed
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The seller and the sale
0 of 5
Listen for a specific answer. If it stays vague, come back to it later in the call.
The business
0 of 6
The numbers
0 of 5
The owner and the team
0 of 5
Deal shape and next steps
0 of 7
The answer affects tax, liabilities and which contracts need consent, so take advice before you agree a structure.
A firm refusal is not always a problem, but ask what lies behind it.
General information only, not legal, tax or financial advice. Adapt the checklist to the business in front of you and take professional advice where it matters.
Guides
From first call to letter of intent
The steps between spotting a listing and signing a letter of intent, what to learn at each one and what a sound letter of intent should cover.
10 minutes to readOwner dependence and how to test it
In many small businesses the owner is the salesperson, the expert and the person every decision waits for. This guide explains why that lowers value and sets out practical tests you can run, from reading the listing to the last weeks of diligence.
9 minutes to readCustomer concentration and why buyers discount for it
When a few customers account for much of a business's revenue, the earnings you are buying are less certain. This guide explains how to measure concentration, why it lowers the price and how to shape a deal around a dominant customer.
9 minutes to readHow to read a business-for-sale listing
A listing is a sales document written to win enquiries. This guide shows how to read its numbers, its wording and its gaps, and how to turn them into questions before you sign an NDA.
10 minutes to read
Red flags to look for
A vague reason for sale
The seller cannot or will not say clearly why the business is for sale, or the story changes. The real reason often tells you what to check first.
Severity: price it inSeller and processThe owner does the selling or holds key relationships
When the owner wins the work and keeps the important relationships, part of the revenue may leave with them. Test how much of that revenue would stay without them before you agree a price.
Severity: price it inOperations and peopleReluctance to share records
The seller delays, filters or refuses access to the financial and operating records you need to check the listing. Past a certain point, what you cannot see matters more than what you can.
Severity: deal breakerSeller and processRefusal of any seller finance or earn-out
The seller wants the whole price in cash at completion and will not defer any part of it. That can be a reasonable preference, but it can also mean the seller does not expect the business to keep performing.
Severity: price it inSeller and processPressure to skip diligence
The seller or broker pushes you to commit before you have checked the business, often with tight deadlines, rival bidders or a discount for speed. A sound business survives checking.
Severity: deal breakerSeller and processKey staff not tied in
If the people who hold the business together have no written terms, no notice periods and no reason to stay, a sale is the moment they are most likely to leave. Find out who matters and what keeps them.
Severity: fixableOperations and peopleContractors who are employees in practice
Treating people who work like employees as self-employed can flatter profit and build up back taxes and employment claims. Size the exposure and the true cost of labour before you agree a price.
Severity: price it inOperations and people
Other checklists
Twenty-minute listing screen
A quick first pass over a business-for-sale listing, so you can decide whether it deserves a call, an NDA or neither before you spend more time on it.
About 20 minutesDiligence document request list
The documents to ask for once terms are agreed in principle, grouped by area so the seller can fill a data room in order and you can see what is still missing.
About 30 minutes
Free tools
Answer about 15 quick questions about a listing to see which areas need checking.