Selling a business
10 Questions to Ask a Seller Before Signing on the Dotted Line
Ten questions a buyer should put to any seller before signing, what a good answer sounds like, and which answers should slow you down.
By Michael D. Rubin, CEO & Founder · Updated September 2026 · 880 words
Before you sign to buy a business, ask the seller why they are selling, how they set the price, how the financials can be verified, who the key customers and employees are, and what legal or operational problems exist. The answers, and how willingly they are given, tell you most of what you need to know about the risk you are taking on.
No question is too basic. Buying a company is one of the largest financial commitments most people make, and you only get one chance to ask before the money moves. Write your questions down, ask them early, and ask again in due diligence, the detailed review of the business that follows a signed letter of intent. The table below lists ten questions worth asking every seller, followed by notes on the ones that matter most.
The ten questions and what to listen for
| Question | What a good answer looks like |
|---|---|
| 1. Why are you selling, and why now? | A clear personal reason that fits what the numbers show |
| 2. What are the biggest challenges today? | Specific problems and a view on fixing them |
| 3. How did you arrive at the asking price? | A recast of earnings with each adjustment supported |
| 4. How can I verify the financials? | Statements that match tax returns and bank records |
| 5. How much depends on the largest customers and suppliers? | Revenue by customer, and written agreements |
| 6. Who are the key employees, and will they stay? | Named people and a plan to keep them |
| 7. What do you do each week, and who does it after? | A realistic handover plan and transition period |
| 8. Any past, pending or threatened lawsuits or claims? | A straight answer, with documents |
| 9. Which contracts, leases and licenses transfer? | A list, with consent requirements identified |
| 10. What would you do if the business did not sell? | An honest answer that shows motivation |
Why the price question matters most
Asking how the price was set forces the seller to defend it. A credible seller or their advisor will show you a financial recast: the reported earnings, plus add-backs for the owner's personal expenses, one-time costs and above-market salaries, arriving at the cash flow a new owner can expect. Each add-back should be documented. If the seller cannot explain the number, treat the price as an opening wish, not a valuation. Compare the asking price with what the recast earnings would support, and ask your CPA or an advisor whether the implied multiple is reasonable for a business of that size and type.
Also ask how the seller expects to be paid. Willingness to carry part of the price as a seller note is often a sign of confidence in the business, and it can make financing easier to arrange.
Concentration and people carry the most hidden risk
A business where one customer or one supplier accounts for a large share of activity can change overnight after you buy it. Ask for revenue by customer for at least three years and look for trends. Our article on how customer concentration affects value explains how buyers price that risk.
People are the other hidden variable. If the seller holds every key relationship personally, or one technician knows how everything works, your first year will depend on keeping them. Ask how documented the procedures are and what will happen to each key person after closing.
Ask about yourself too
Buying a business is also a question of fit. What skills does it take to run this company well: selling, managing crews, handling a technical process, working with large accounts? Do you have them, or a plan to hire them? A good business can struggle under an owner who does not suit it. Consider, too, how much of your time the first year will demand and what that means for your current work.
Think about financing at the same time. SBA 7(a) loans are common for smaller acquisitions, while larger deals often combine bank debt, buyer equity and a seller note. Lenders will ask many of the same questions you do, so the answers matter twice. Our business financing page covers the usual structures.
Keep asking through due diligence
The first answers usually come in conversation. Due diligence is where you confirm them in documents: tax returns, bank statements, contracts, leases, payroll, licenses and any litigation files. Bring your own CPA and transaction attorney. Where an answer in diligence differs from what you were told earlier, find out why before you sign the purchase agreement.
Use a written list so nothing is missed, and keep a record of each answer and who gave it. If something said in conversation is important to your decision, such as a customer relationship or a pending contract, ask for it to be confirmed in writing or reflected in the representations of the purchase agreement.
A note on how MDR & Associates works with buyers
MDR & Associates represents sellers, so on our listings we work for the owner. We still want buyers to succeed. Qualified buyers sign a confidentiality agreement and complete a financial profile, then receive the marketing package and financial recast, and questions are welcome at every stage. To see what is available and how our process works for buyers, visit buy a business.
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Questions owners ask next
When should I ask the seller these questions?
Ask the broad ones at your first meeting, after signing a confidentiality agreement, and before making an offer. Then confirm every answer with documents during due diligence. Anything that changes between the first answer and the documents deserves a direct follow-up before you sign.
What if the seller will not answer a question?
Ask why. Some details, such as customer names, are reasonably held back until later in the process. But a seller who will not explain the price, share tax returns or discuss lawsuits in diligence is asking you to take a risk you cannot measure.