Ask why the owner is really selling, how the profit is documented, who the biggest customers are, how dependent the business is on the owner, and what would break if the seller left tomorrow. Every good question tests one thing: how durable is the cash flow you're paying for? Take nothing at face value, the answers get verified in due diligence.
The questions that matter most
| Question | What it reveals |
|---|---|
| Why are you selling? | The biggest hidden risk in the deal |
| How is the profit documented? | Whether the earnings are real and verifiable |
| Who are your top customers? | Customer concentration risk |
| How involved are you day to day? | Owner dependence and transferability |
| Why did past employees leave? | Team stability and culture |
| What would break if you left tomorrow? | Key-person and process risk |
Start with "why are you selling?"
It's the single most important question. Burnout, retirement, or relocation are normal. But a looming competitor, a lost key customer, an expiring lease, or a declining industry are risks you need to price in, or walk from. Listen for answers that don't match the numbers.
The financial questions
- Three years of tax returns and financial statements, do they reconcile?
- How were the add-backs calculated?
- What are the real seller's discretionary earnings?
- How much working capital does the business need to run?
- Is revenue recurring or one-time?
Then verify the answers, don't just collect them. Use the due diligence checklist to structure your requests and a quality of earnings review to confirm the profit.
Frequently asked questions
Why they're selling, how profit is documented, who the top customers are, how owner-dependent it is, why employees left, and what breaks if the owner leaves.
"Why are you selling?" The real answer often reveals the biggest risk, a competitor, lost customer, or expiring lease you must price in or walk away from.
Three years of returns and statements, how add-backs were figured, true SDE, working-capital needs, and whether revenue is recurring, then verify with a QoE.
