Buyer's guides · Before you make an offer
Questions to ask when buying a business — and what a real answer has to prove
Ask the seller why they are selling, what the earnings really are, whether the lease transfers, who the customers are, who runs the place day to day, and which debts follow the business to you. Then ask for the document behind each answer. A question the seller can answer with a story and no paper has told you almost nothing.
What this answers
- The questions that change a decision, grouped the way a deal actually unfolds — earnings, lease, customers, people, what follows you after closing.
- For each question, the document a real answer rests on — because an answer you cannot check is a story, not a fact.
- How to hear the difference between a seller who is guarded and a seller who is hiding something.
- The extra questions when you are buying from a friend, a relative, or the person you currently work for.
- Which questions belong to your lender and your attorney rather than the seller.
A question is only as good as the paper behind it
Most lists of questions to ask when buying a business treat the asking as the work. It is not. A seller who wants to sell will answer every question you put to them, fluently and in good faith, and you can walk away from that conversation with forty answers and no more certainty than you arrived with. The answers are the easy part. What matters is whether each answer is attached to something you can read.
So every question below comes with a second column: the document that turns the answer into a fact. Ask the question, listen to the answer, then ask for the paper. If the paper does not exist, you have not been lied to — you have simply learned that this particular claim is unverified, which is a different and equally useful thing to know.
The arithmetic is what makes this worth the awkwardness. Main Street businesses change hands at roughly 2–3× SDE, so a claim about earnings that nobody checks is not a rounding error — it is multiplied by two or three and paid in cash at closing. The document request and this conversation are the same job approached from two directions.
"Why are you selling?" and the follow-ups that matter more
This is the question everyone knows to ask, and the one that reveals least, because every seller has a prepared answer and most of those answers are true. Retirement, health, divorce, a move, boredom after twenty years. Take it at face value and then ask the questions that test it.
- "How long has it been for sale, and has it been listed before?" A business on its third listing with three price cuts has been examined by other buyers who walked. You would like to know what they found.
- "Did anyone get as far as an offer? What happened?" A deal that died in diligence died of something. Sometimes it was the buyer's financing. Sometimes it was the lease.
- "What would you fix first if you were staying another five years?" This one gets answered honestly more often than it should, because it flatters the seller's expertise. It is also a list of the capital expenditure you are about to inherit.
- "What will you do after the sale?" A seller who plans to stay in the industry is a seller whose non-compete matters more than any other clause in the contract.
Questions about the earnings
Everything on this list has a document behind it, which is why it is the section where a vague answer costs the most.
| Ask | A real answer rests on | What a weak answer sounds like |
|---|---|---|
| What did the business actually earn last year, and how is that number built? | Tax returns and profit and loss statements for the same three years, reconciled to each other | A single adjusted figure, with the build-up in a spreadsheet the seller maintains |
| Which adjustments are in your earnings figure, line by line? | An add-back schedule where each line has an invoice, a bank entry or a payroll record | "The usual owner stuff" — and a total that grew since the listing |
| Does your earnings figure include your own pay, and do you work full time? | The payroll register, read against who is actually on site | An absentee owner's salary added back with no manager anywhere in the payroll — see SDE |
| Can I tie twelve months of deposits to the revenue you are claiming? | Bank statements for every business account, consecutive | "The bank statements won't match, we do a lot of cash" |
| Has revenue moved in the last two years, and why? | Monthly profit and loss statements, where a trend is visible rather than asserted | An annual figure only, which hides the direction entirely |
| Is there a year in these accounts that is not representative? | The seller's own explanation, then the documents for that year | Nothing — this question is worth asking because a candid seller answers it well |
One habit is worth more than any single question here: ask the same thing twice, weeks apart, and see whether the answer stays the same. Earnings that improve during diligence with no new documents behind them are a negotiating position, not a discovery.
Questions about the lease, the licences and the liens
These are the questions that kill sound businesses. The earnings can be real, the customers loyal, the staff willing — and the deal still cannot happen, because the right to trade from that address or under that licence does not transfer to you.
| Ask | A real answer rests on |
|---|---|
| How long is left on the lease, and what are the renewal options? | The signed lease and every amendment — not the summary |
| Will the landlord assign the lease to me, and have you asked them? | Written landlord consent, or at least a recorded conversation — see lease assignment |
| Does the landlord own the building, and are they related to you? | Title, and the rent tested against market rather than against a family arrangement |
| Which licences does the business trade under, and do they transfer? | The licences themselves, with expiry dates, and the issuing authority's transfer rules |
| Is anything secured against the assets I am buying? | A lien search you run yourself, not the seller's assurance — see UCC-1 filings |
| Are there any disputes, claims or unpaid taxes I should know about? | The answer in writing, in the purchase agreement, with representations that survive closing |
| If it is a franchise: will the franchisor approve me, and what will they require me to spend? | The current FDD and the signed franchise agreement — see Item 19 |
Whether the debts follow the business to you depends on how the deal is structured, and that is the single most expensive thing on this page to get wrong. It is a question for your attorney, informed by asset versus stock sale, not a question to settle by asking the seller what they think.
Questions about the customers and the people
| Ask | A real answer rests on |
|---|---|
| What share of revenue comes from your largest customers? | Top customers by revenue for two years, names redacted if need be — see customer concentration |
| Are those relationships with the business or with you personally? | Contracts. Where there are none, assume the relationship walks out with the seller |
| Have you lost a major customer in the last two years? | Revenue by customer over time, where a departure is visible |
| Who actually runs the place when you are away, and for how long can they? | The payroll register, plus a plain question about the last real holiday |
| Who knows the business is for sale? | Nothing — but the answer shapes everything about how you approach the staff |
| Which employees are essential, and will they stay? | Tenure and pay per role, and whether anyone is paid below what a replacement would cost |
| Are any of your staff contractors who should be employees? | The payroll register against the contractor payments — a question for your CPA to finish |
Questions about what happens after closing
- "How long will you stay to hand over, and on what terms?" Get the weeks, the hours and the pay into the agreement. A handover everybody assumed would happen is the most common broken promise in small-business sales.
- "Will you carry part of the price?" A seller note tells you what the seller privately believes about the earnings continuing. A flat refusal is information; so is an eagerness to finance most of it.
- "What is not included in the sale?" The vehicle, the tools, the domain, the social accounts, the phone number, the customer database. Ask for the list of what conveys and read it for what is missing.
- "What happens to the money owed to the business, and by it, at closing?" The working capital question, and the one most first-time buyers meet for the first time a week before closing.
- "Are you open to part of the price depending on performance?" An earnout or an escrow holdback is how a gap in trust gets priced instead of argued about.
Questions to ask when buying a business from someone you know
Buying from a friend, a relative or the employer you have worked for ten years feels like the safe version of this transaction. It is the one where verification is hardest, because asking for tax returns now reads as an accusation, and because you already believe you know the answers.
You know how the business runs. That is genuinely worth something. What you do not know is what the accounts look like, what is owed, what the lease says, or what the owner has been paying themselves — and familiarity substitutes for none of it. Three questions belong specifically to this situation:
- "Can we do this with the same documents a stranger would get?" Asked early, as a matter of process rather than suspicion, this is answered easily. Asked late, it sounds like doubt.
- "Who is advising each of us?" One attorney cannot represent both sides. A shared advisor in a deal between friends is how a friendship ends over money.
- "What happens to us if this goes badly?" Worth saying out loud before a seller note is signed, because a seller note between friends is a loan that has to be collected by someone who will still be at the wedding.
Where the price was agreed before any documents were read — common in these deals — the price was agreed on the story. Reading the documents afterwards does not insult anybody; it just means the number gets to be right.
Why "43 questions to ask when buying a business" is the wrong shape
Numbered lists of this kind are popular because they feel like coverage. The trouble is that a long list flattens everything to the same weight, and these questions are not remotely equal. Whether the landlord will assign the lease can end the deal on a Tuesday afternoon; whether the seller has a preferred supplier cannot. A list of forty-three treats both as one item of homework.
Ask in the order in which an answer can disqualify the deal. The lease and the earnings comparison are minutes of work and can save you a professional fee; the long tail of operational detail only matters on a deal that survived them. That order is the whole idea behind a diligence checklist you work top down, and behind screening a packet before paying anyone to read it.
The questions that are not for the seller
Some of what you need to know cannot come from the person selling, and asking them anyway produces a confident answer that is nobody's fault when it turns out wrong.
- Your lender. What coverage they need the earnings to show, what they will want from you, and what they do with a lease shorter than the loan. Start at SBA 7(a) and DSCR, then ask the lender for their own current requirements — these change by edition of the rules, and the answer that matters is the one in force when you file.
- Your attorney. Which liabilities follow the business, how the LOI should bind, what the representations have to survive.
- Your CPA. Whether the earnings are real once the adjustments are tested, and whether a Quality of Earnings review is warranted here.
- The public record. Liens, litigation, licence status, and the online reviews that describe the last two years of the business more candidly than anyone at the table will.
None of these questions replaces an attorney, a CPA or a lender. They decide whether this deal deserves them — and they mean you arrive already knowing which answers had no paper behind them. That is also what a pre-screen is for: reading the packet you were given and reporting what it does not prove.
Send the document list before the conversation, not after
Read what arrives first. Questions written after reading the packet are specific, and a specific question is far harder to answer with a generality. It also means you spend the meeting on what the documents did not tell you.
Ask open, then ask for the paper
"How is that number built?" before "can I see the schedule?" The order matters: the open question gets you the seller's own version, and the document then either confirms it or does not. Reverse the order and you get an answer shaped by what they know you have.
Write down the answer the same day, in their words
Dated notes in the seller's own phrasing are what let you notice, five weeks later, that the story changed. They are also what your attorney will want when representations are drafted.
Keep a list of answers with no document behind them
This list is the real output of the conversation. Each line is either a question for a professional, a clause in the agreement, or a reason to reprice. Nothing on it should quietly become an assumption.
Ask the important questions twice, weeks apart
Not as a trap — memories are genuinely imperfect. But an earnings figure or a reason for selling that changes between tellings, with no new documents in between, is the most useful thing you will learn for free.
Questions buyers ask
What questions should I ask when buying a business?
Ask why they are selling and how long it has been for sale; what the business earned and how that figure is built; which adjustments are in it and what proves each one; how long the lease runs and whether the landlord will assign it; what share of revenue the largest customers represent; who runs the business day to day; which debts and liens follow the business; and what the seller will do to hand over. For each answer, ask for the document behind it.
What are good questions to ask when buying a business — and what makes a question good?
A good question is one whose answer you can check. "What did you earn?" is weak on its own; "what did you earn, and can I see the tax returns and the add-back schedule that build it?" is strong, because the answer either has paper behind it or does not. Questions that can only ever be answered by opinion belong at the end of the process, not the start.
What should I ask when buying a business from someone I know?
The same things you would ask a stranger, asked earlier. Agree at the outset that the documents a stranger would receive are the documents you will receive, so the request never has to feel like an accusation later. Make sure each side has its own attorney, and if part of the price is to be carried as a seller note, settle in advance what happens if the business cannot pay it.
Is it rude to ask a seller why the business is for sale?
No — it is expected, and every serious buyer asks it. The answer is rarely the revealing part, because most reasons are ordinary and true. What tells you more is how long the business has been listed, whether it has been listed before, and whether an earlier offer collapsed during diligence.
What if the seller will not answer a question?
Distinguish between a refusal, a delay and an answer with nothing behind it. Some reluctance is reasonable — customer names and employee records often wait for an LOI. What matters is the pattern: the document that matters most being the one that is always with the accountant is itself a finding. Record what you asked, when, and what came back, and treat unanswered as unverified rather than as fine.
Sources
- IBBA / M&A Source, Market Pulse Q2 2026 (255 advisors, 181 closed deals)
- IRS — Get transcript: how a taxpayer obtains a return transcript
- FTC — Franchise Rule Compliance Guide (16 CFR Part 436)
Read next
- Due diligence checklist for buying a small business
- What documents to ask a seller for — and what each one has to prove
- Seller's Discretionary Earnings (SDE)
- Lease assignment and landlord consent
- Pre-screen, Quality of Earnings, or full due diligence — which does your deal need?
- how-it-works.html
Have the documents already? A DealLoupe pre-screen reads what the seller gave you and reports the red flags, the evidence gaps and the questions to ask — before you spend anything on due diligence. See what it costs →
Last updated: 2026-09-28. Educational information, not financial or legal advice — and not a substitute for a CPA, an attorney or a formal Quality-of-Earnings review.