Buying a business
Buying? Selling? Seven Key Points to Consider
The seven points buyers probe in every business sale, what each side should ask or prepare, and why one list serves buyer and seller alike.
By Michael D. Rubin, CEO & Founder · Updated September 2026 · 794 words
Whether you are buying or selling, the same seven points decide most deals: what exactly is for sale, which assets make the business work, whether every asset earns its keep, where the competitive advantage lies, how the business can grow, how much working capital it needs and how deep the management goes. Buyers use them to test a company. Sellers who prepare for them get better offers and fewer surprises.
The table sets out each point from both sides. The sections that follow explain the ones that most often move the price.
The seven points from both sides of the table
| Point | What the buyer asks | What the seller should have ready |
|---|---|---|
| 1. What is for sale | What is included and excluded, including real estate, inventory and equipment | A clear list, and a decision on the real estate |
| 2. Key assets | Which proprietary assets drive the business, such as designs, software or trademarks | Proof the company owns them and that they transfer |
| 3. Asset productivity | Which assets earn money and which are a drag | Unproductive assets sold or explained before going to market |
| 4. Competitive advantage | Why customers choose this company, and whether that will last | Evidence: retention, pricing, reputation, contracts |
| 5. Growth | Where the next stage of growth comes from | Specific, credible ideas, even if not yet pursued |
| 6. Working capital | How much cash the business ties up to operate | Monthly figures for receivables, inventory and payables |
| 7. Management depth | Who runs things if the owner steps away | Managers in place, with defined roles |
Assets: owned, transferable and earning their keep
Many companies depend on something intangible: product designs, a formula, custom software, a brand. A buyer needs to know that the company, not the owner personally, holds these and that they pass with the sale. A seller should confirm ownership and close any gaps well before going to market.
Physical assets deserve a hard look too. Equipment that sits idle, vehicles that cost more to maintain than they earn, or a building the business has outgrown all drag on returns. Sellers often do better disposing of unproductive assets before a sale, so the business a buyer sees is lean and every asset has a reason to be there. Buyers should ask which assets they would sell in their first year, and why the seller has not.
Competitive advantage and growth
Every business says it is better than its competitors. Buyers want evidence: how long customers stay, whether the company can charge more than rivals, contracts that renew, a reputation that shows up in reviews and referrals. A seller who can show those facts supports the price; one who simply asserts them invites doubt. If the advantage is thin, a seller may still have time to strengthen it before selling.
Growth works the same way. Sellers need not have pursued every opportunity, but they should be able to describe the obvious ones: new services, new territory, better pricing, customers not yet approached. Buyers pay for proven earnings, and a credible growth story is what makes them compete for the chance to capture it. If a business cannot grow, both sides must price that in.
Working capital and management depth
Some businesses tie up a great deal of cash in receivables and inventory; others collect quickly and hold little stock. A buyer needs to know how much working capital the company requires, both to plan financing and because the purchase agreement will set a level to be left in the business at closing. Our page on business financing covers how buyers usually fund it.
Management depth may matter most of all. A company where the owner makes every decision and holds every key relationship is harder to buy and to finance than one with capable managers. Sellers who build that layer before selling are rewarded; our answer on building a management team before selling explains how. Buyers should meet the managers, understand their roles and ask whether they plan to stay.
The rest of the list
Seven points do not cover everything. Financial reporting, barriers to new competitors, employee relationships, leases and legal matters all come up in due diligence. The seven above are the ones worth settling early, because they shape the offer itself rather than the fine print. Buyers who want to see companies prepared this way can register through our buyer page.
How MDR & Associates prepares a company on these points
We represent sellers. Before a company goes to market we work through each of these points with the owner: what is included, which assets matter, the financial recast, the evidence for the company's advantage and where its growth could come from. Buyers then get clear answers early. Whether you are preparing to sell or looking to buy, contact us.
Where this fitsBuy a business in Texas →
Questions owners ask next
Should a seller sell unproductive assets before going to market?
Often, yes. Idle equipment or surplus vehicles add little to what a buyer will pay and can raise questions about how the business is managed. Selling them, or at least documenting why they are kept, simplifies the story. Talk to your CPA first, because the timing of asset sales has tax consequences.
How can a buyer judge competitive advantage without talking to customers?
Through the records. Customer retention over several years, pricing compared with competitors, repeat-order patterns, contract renewals and public reviews all show whether the advantage is real. Direct customer conversations, if they happen at all, usually come late in due diligence and are arranged carefully with the seller.