M&A Deal Points | The first interactions between buyer and seller

Written By Scott Weavil

In the initial stages of an M&A process, conversations between buyers and sellers are often casual and relationship-focused. However, as discussions progress, buyers will begin to dig deeper to understand the fundamentals of the business.

As a seller, it’s critical to anticipate these questions and be ready to provide thoughtful answers. Here’s a breakdown of the most common topics buyers explore early in the process:

1. Business Origins

  • When was the business founded, and who started it?

  • If the seller didn’t found the business, how did they come to own or operate it?

2. Ownership Structure

  • Who owns the business today?

  • How are key decisions made within the organization?

3. Post-Sale Plans

  • If the owners are actively involved, do they plan to stay, transition gradually, or exit entirely after the sale?

4. Day-to-Day Operations

  • Who handles the operational responsibilities—the owners or other leaders?

5. Motivations for Selling

  • Why are the owners considering selling now?

6. Financial Overview

  • What are recent revenue and EBITDA figures?

  • Has the business been growing, stable, or contracting over time?

7. Customer Base

  • What types of customers does the business serve?

  • Are customer relationships short-term, long-term informal, or contractual?

  • Do any customers account for more than 10% of total sales?

8. Products & Revenue Mix

  • How are sales distributed across different product or service segments?

9. Competitors & Market Position

  • Who are the business’s main competitors?

  • What challenges does the business face in maintaining or growing its market share?

  • What opportunities for growth are on the horizon?

10. Organizational Structure

  • What does the organizational chart look like, and what is the total headcount?

  • Are any family members involved in the business, and do they plan to stay post-sale?

11. Employee Retention & Challenges

  • How does the business approach recruiting and retaining talent?

  • Are there any current staffing challenges?

12. Facilities & Equipment

  • Are the business’s facilities owned or leased?

    • If leased, when do the leases expire?

  • What are typical maintenance capital expenditures (CapEx)?

  • Is CapEx a barrier to future growth?

Tailoring the Discussion

While some buyers may follow a structured question list, others prefer a conversational approach, weaving questions naturally into the discussion to build rapport. Sellers should be prepared for both styles and provide open, detailed responses that foster trust and transparency.

What Else Should Buyers Ask?

This is just the beginning of what a buyer might want to know. Being proactive and thorough in answering questions not only helps build confidence but can also expedite the process and establish a positive working relationship.

What other questions have you encountered in M&A discussions?

Scott Weavil
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