You don’t need to know all the answers when buying a business; you just need to know how to ask the right questions.
I believe that gathering intelligence is a crucial part of the sales process that, when done right, will save you a lot of time because you will have enough information to qualify the seller/business early on.
This information will help you determine whether the business opportunity is worth pursuing or not.
You will ask questions that buyers don’t want to answer. They may give you short answers, and for this, you will need to learn how to pivot and ask this same question a different way until you get the answer you’re looking for.
When you are dealing with a serious buyer, for the most part, they will be vulnerable and honest, because they are hoping you are their buyer, thus earning you instant rapport. Be bold and ask the hard questions, and remember: the only stupid questions are the ones you don’t ask.
Most Common Questions Asked By Buyers:
- Why are you selling?
- What do you plan to do with the money?
- Who are your competitors?
- Can this business be relocated?
- How can the business be improved?
- Are you willing to stay on?
- What do you do for marketing?
- How is your sales team?
- Will you owner finance?
- Do you have any partners?
But you need to dig deeper…
It’s not only about asking questions about the business. You must ask questions about the seller’s possible interests.
There is no specific question to ask, no magical inquiry that will seal the deal; but when you feel that one of your questions touches an emotional point, then keep building on that subject.
Some of the questions could be:
- How many days do you work? What time do you get to work? What time do you get home?
- How many children do you have? How old are they? What do they do? Do you have grandkids?
- What does your spouse do?
- What do you and your spouse enjoy doing on your free time?
- How many vacations do you take a year?
- What do you do in your free time?
- What was your childhood like?
You get the idea.
As you can see, none of the questions were about the business!
It’s crucial for you to really dissect these questions and think about their possible answers, and the breakthroughs they may lead to.
Consider some of the following responses you may hear…
- “My marriage is on the rocks…”
- “My spouse wants to move…”
- “I am never home…”
- “I don’t have time for hobbies.”
- “I haven’t gone on a vacation in 3 years.”
- “We want to buy a new house.”
- “My parents are older, and I want to spend more time with them.”
- “I would love to spend time hunting, fishing, etc.”
- “I don’t really care, I really love what I do.”
And think about the information your obtaining – and how this information can assist you with the business acquisition.
This process I’ve described is not ‘BUILDING RAPPORT,’ it is ‘GATHERING INTELLIGENCE.’
Not Just What They Say, But How They Say It
Even though the answers help you gather more information about the seller, what you need to pay close attention to is how they answered these questions.
Things to look for:
- Did they get emotional?
- What questions made them smile?
- Any signs of regret?
- What is stressing them out?
You see, you are looking for pain points. As you gain more experience talking to sellers, you will learn to ask better questions and learn more about the seller/business.
My experience is that when you ask quality questions, they respect you and take you seriously because it shows that you are very interested.
Why Asking the Right Questions Are Important?
Asking the right question is essential because when you present the offer, you can reiterate the seller’s answers to your questions – and demonstrate how you came up with the offer. They will know that you care and that you were listening.
Remember: when you show people you care, they tend to trust you.
People do business with people they trust and like; so you have to be authentic when you ask these questions.
In mergers & acquisitions, there are many moving factors in closing a deal – including analyzing financial reports, making an offer, negotiations, financing and so on.
All of these factors are important, but I feel that asking the right questions can help in making an offer that will get accepted with great terms.
Summary Of Gathering Information
Steve Jobs said that you need to learn to size people up fairly quickly, make decisions without knowing people too well and always be refining your intuition.
Asking questions to a potential seller can be very uncomfortable. Getting personal with strangers with whom you’re looking to transact is never easy – but it’s required to assist you in making the best offer possible that will lead to a ‘win’ for both parties.
As I mentioned earlier, the more experience you get, the more comfortable gathering intelligence will become. Don’t be afraid to ask tough questions and dig a little deeper.
Have any questions about gathering intelligence for your business acquisitions? Leave them below!