What Sellers Don't Hear Until It's Too Late
By
What buyers are asking about business acquisitions, and what owners should understand before selling.
An owner and a buyer can look at the same business and see two very different things.
The owner sees 20 or 30 years of hard work. Customers earned one at a time. Employees who've been there for years. Equipment, relationships, and a reputation built in the community.
The buyer is thinking about what happens after the owner leaves.
Will the customers stay? Who will run the business? Are the earnings sustainable? What problems might surface after closing?
I've sold two businesses of my own, spent more than 13 years in commercial banking, and now help owners sell their businesses throughout Southwest Florida.
One thing I've learned is that what makes a business successful isn't always what makes it attractive to a buyer.
Here are four questions we're hearing from buyers and what owners can learn from them.
1. Am I buying a business or buying myself a job?
Buyers want to understand how much the business depends on its owner.
On a recent trades listing, a serious buyer asked how many hours the owner worked, what responsibilities he personally handled, whether the managers intended to stay, and who would hold the required contractor's license after closing.
Those aren't unusual questions. They're trying to understand whether the business can continue operating successfully through an ownership change.
An owner who has developed capable employees, established repeatable processes, and built customer relationships beyond themselves may have more interested buyers and greater flexibility in negotiations.
Something to consider: Could your business operate for 30 days without you?
2. Will the earnings hold up under scrutiny?
A business might look profitable on paper, but buyers want to understand where those earnings come from and whether they'll continue.
One of the most common areas of disagreement involves add-backs, expenses that an owner believes shouldn't count against the business's earnings.
On a recent transaction, the buyer requested documentation supporting vehicle expenses, insurance, travel, management compensation, and adjustments to the owner's salary.
They also wanted to understand why profitability had changed over the preceding three years.
Buyers aren't necessarily questioning the owner's honesty. They're trying to determine what the business will actually earn after they take over.
Owners who maintain clean financial records and can explain their adjustments have an advantage when those conversations begin.
Something to consider: Could you support every adjustment you're making to your company's earnings?
3. What problems am I going to inherit?
Buyers expect to make improvements after purchasing a business. What concerns them are surprises that could require more time or money than anticipated.
A customer representing 30% of revenue. Aging equipment. A key employee planning to retire. Maintenance agreements with services still owed to customers.
In one recent home services transaction, the buyer specifically asked how many customers had prepaid for maintenance visits that hadn't been completed.
It's a small detail, but it matters. The buyer may inherit the responsibility for performing work the seller has already collected payment for.
These issues don't necessarily prevent a sale, but they can affect price, terms, and the buyer's confidence.
Something to consider: What would a new owner discover during their first 90 days that they might wish they'd known before closing?
4. How much risk am I taking?
A buyer may love the business and still want protection if something goes wrong.
That can mean seller financing, an earnout tied to future results, or asking the owner to remain involved for an extended period.
Those arrangements aren't inherently bad, but they can change what the sale actually means for the seller.
An owner planning to retire may not want another three years of involvement. Someone depending on the sale proceeds may prefer a slightly lower cash offer over a higher price dependent on future performance.
This is why I encourage owners to think about their personal objectives before evaluating offers.
Something to consider: Is your priority the highest possible price, a clean exit, protecting your employees, or some combination of those things?
Looking at Your Business Through a Buyer's Eyes
You don't need to be ready to sell to start asking these questions.
In fact, understanding what buyers look for a few years before selling can give you time to address concerns, strengthen the business, and make decisions without the pressure of an active transaction.
Some changes take months. Others take years. And some may not be worth making at all.
The important thing is understanding your options while the decisions are still yours.
If selling your business is somewhere on the horizon, I help owners throughout Southwest Florida understand what their businesses may be worth, what buyers will likely question, and how to prepare for whatever comes next.
What would a buyer see if they looked closely at your business today?