M&A Deal Points | Essential Questions Sellers Should Be Ready to Answer

When entering an M&A process, the initial management meeting is crucial. Buyers will likely have already reviewed the Confidential Information Memorandum (CIM), but they’ll want to hear key details directly from the seller. This helps provide clarity and a deeper understanding of the business.

At Sierra Pacific Partners, we believe these are fundamental questions any buyer should ask, and they are the same ones we use before engaging with a client. These insights help us determine whether the business is a good fit and how best to position it for a potential sale.

The Basics: Questions to Expect

As a seller, here are the foundational questions you should be prepared to answer:

• What is your name?
  A simple start, but it helps set the stage for a professional introduction.

• How is your business taxed?
  Buyers will want to understand whether your business operates as an LLC, S-Corp, or C-Corp, as tax treatment can impact the deal structure.

• Do you have a website or significant online presence?
  Your online footprint is a valuable resource for potential buyers to assess the public perception and branding of your business.

• When was the business founded, and by whom?
  If you’re not the original founder, be ready to explain how you became the owner.

• Where are your business locations, and do you own or lease them?
  Buyers need clarity on property arrangements and obligations.

• What geographic areas do you serve?
  Understanding the markets you operate in is key to evaluating growth potential.

• Why are you considering selling the business?
  Whether it’s retirement, new business interests, or a desire to pursue other opportunities, your motivation matters to buyers.

• Who manages the day-to-day operations?
  Buyers will want to know if you handle operations or if there is a manager in place to ensure continuity.

• What are your plans post-closing?
  Are you retiring, staying on as an employee, helping during the transition, or exploring new business ventures? This will help structure the deal terms.

• What is the current size of your business in terms of revenue or EBITDA?
  Buyers need to know the financial health and scale of the business.

• Is the business growing, contracting, or stable?
  What are the main factors driving this trajectory? Be prepared to discuss growth drivers or challenges.

Looking Ahead

These basic questions set the foundation for the M&A process, but they’re just the beginning. In the next post in this series, we’ll dive into more in-depth questions that take a closer look at the specifics of the business and its operations.