First call with Seller

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July 11, 2019

by a searcher from Harvard University - Harvard Business School in Atlanta, GA, USA

What's a question or two that you have found helpful to ask the seller on your first call with them?

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Reply by a searcher
from University of Southern California in Los Angeles, CA, USA
Here are my top 10:
1. Why is it for sale (the advertised reason probably doesn’t mention something serious, so you need to delicately keep circling back to this subject)? *This is only for brokered deals. 2. Who are the buyers and how does one compete (price, service, quality, delivery, product performance, relationships, etc)? 3. Who are the main competitors and what advantages do they have? How has the industry changed over the past 5 years? 4. What is the gross revenue trend? What is the % cost-of-goods-sold and profit margins before tax? How have those changed over the past 5 years (financials may provide this information)? 5. What do you have to be really, really good at to succeed in this business? 6. What is currently the critical skill set of the President/General-Manager? What role does he play in the operation of the Company (initially he will downplay his role so, like above, you need to circle back to this question)? Once sold, who becomes the most important remaining employee and why? 7. What additional investments need to be made in order to insure the Company’s future? 8. What are the critical items to be monitored regularly (if not constantly) to make sure the Company in on track? 9. Who are the key suppliers to the Business and are they critical? How much manufacturing is outsourced and where? Is there a union? 10. What is the formula for success if we define success as just keep doing what you always have done? What are critical mistakes to be avoided?
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Reply by a searcher
from Amherst College in Portsmouth, NH 03801, USA
the best luck i've had is connecting on something personal: a mutual acquaintance, their local philanthropy thing, a hobby / passion, or simply something about family / children succession - but the main rule is to connect on a human level about something that is not necessarily related to the business... once you've crossed that point, the next questions (about the business) are so so so much easier to ask - using this approach I have often received a "you know I hang up or don't return 99% of these types of questions... but I'm glad we're talking" - the key? make the connection genuine so look for things you have in common to bring up / discuss initially
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