Questions to Ask When Buying a Business: Seller, Broker, Landlord

The key questions to ask when buying a business cover why the owner is selling, how revenue and profit are earned and documented, customer and supplier concentration, staff and owner dependence, the lease, licenses, liabilities and the transition. Ask the seller, the broker, the landlord and key staff, and verify every important answer against documents such as bank statements, tax returns and contracts.

Questions are only useful if you know what a good answer looks like and where to confirm it. Below, the questions are grouped by who you ask, with notes on what to check. Ask the screening questions before you make an offer and the detailed ones during due diligence.

Which questions should you ask the seller first?

The first conversation is about the story of the business and the reason for the sale. These questions help you decide whether the business is worth deeper work.

• Why are you selling, and why now?
• How did you start or acquire the business, and what has changed since?
• What does a normal week look like for you in the business?
• What would you do differently if you were staying?
• Who are your main competitors, and how do customers choose between you?
• What is the biggest risk to the business in the next two years?
• How long are you willing to stay for training after closing?
• Would you consider part of the price as seller financing?

A seller who is willing to finance part of the price is signalling confidence in future cash flow. A seller who refuses any transition period may be telling you how much the business depends on them. Our guide on seller financing covers how such terms are usually set.

What should you ask about the financials?

Financial questions decide the price, so ask them precisely and ask for documents with each answer.

• Can you provide three years of tax returns, profit and loss statements and balance sheets?
• Can you provide the bank statements for the same period?
• How do the tax returns, the P&L and the bank deposits reconcile?
• What adjustments are included in SDE or EBITDA (owner salary, personal expenses, one-time costs), and what is the evidence for each?
• Is any revenue received in cash, and how is it recorded and deposited?
• How seasonal is revenue, and what does monthly cash flow look like?
• What are the main costs, and have any recently increased?
• What working capital (inventory, receivables, payables) does the business need to operate?
• Are there any debts, liens, tax liabilities or unpaid vendors?

If revenue in the P&L does not appear in bank deposits, treat it as unverified. Our guide on how to value a business explains why buyers pay a multiple of verified earnings, not reported ones.

What should you ask about customers, sales and marketing?

• Who are the top ten customers, and what share of revenue does each provide?
• Are there written contracts, and can they be assigned to a new owner?
• How many customers are recurring, and how long do they stay?
• Where do new customers come from, and what does it cost to acquire them?
• Who owns the website, domain, phone numbers, social accounts and online reviews?
• Have any large customers left in the past two years, and why?

A single customer providing a large share of revenue is a pricing issue at minimum. Contracts that require consent to assign need attention in the deal structure.

What should you ask about operations and staff?

• How many employees and contractors work in the business, in what roles, and on what pay?
• Which people are critical, and are any likely to leave after the sale?
• Are workers classified correctly as employees or independent contractors?
• Are payroll taxes, workers’ compensation and benefits up to date?
• Which tasks only the owner can do today?
• What equipment is used, how old is it, and what needs replacing soon?
• Which suppliers are critical, and are there written terms?
• What software and systems run the business, and who holds the accounts?

Worker misclassification can create back taxes and penalties. The IRS publishes the test for employee versus contractor status; your CPA or attorney should review the arrangements.

Which questions should you ask a broker when buying a business?

A broker usually represents the seller and is paid by the seller. Questions to a broker are about the process and what they know, not about advice.

For more on how brokers and buyer-side advisors differ, see business broker vs advisor.

What should you ask the landlord?

For a location-based business, the lease can matter as much as the business. Ask the landlord directly, usually with the seller’s permission once you are serious.

• How much term is left on the lease, and are there renewal options?
• Will you consent to assign the lease or sign a new lease with the buyer?
• Will you require a personal guarantee or a larger deposit?
• Are there planned rent increases, redevelopment plans or a sale of the property?
• Is the tenant current on rent and other charges?
• Are there any disputes or notices of default?

If the landlord will not commit to the lease on acceptable terms, the deal should not close.

What should you ask a franchisor or about licenses?

For a franchise resale, ask the franchisor about transfer approval, transfer fees, required training, any remodel obligations and the remaining term of the franchise agreement. Review the Franchise Disclosure Document as covered in how to buy a franchise.

For licenses and permits, ask which ones the business holds, whether they transfer or must be reissued, how long reissue takes, and whether any inspections or violations are open. Requirements vary by state and city.

Which questions should you ask yourself?

• Can I work in this business every day, in this role, for the next several years?
• Does the price leave enough cash for working capital and a reserve?
• Would I still buy it if revenue fell by a meaningful amount in the first year?
• If I need an E-2 visa, will I own at least 50% or control the business, and is it large enough not to be marginal?

The last question is for your immigration attorney to confirm, but it should shape the search from the start. See businesses that fit E-⁠2 requirements.

How do you verify the answers?

Write down every answer and tie it to a document: bank statements, tax returns, contracts, the lease, payroll reports, license records. Where answers and documents disagree, ask again in writing. Patterns in the gaps often reveal the real issues, which is why our red flags guide and due diligence checklist are built around documents rather than conversations.

Next step

TealBridge prepares the question list for each business, asks the seller and broker on your behalf, collects documents and checks every answer against them as part of our buyer-side business search and due diligence. Contact us when you have a business in view or want help finding one.