What to do for meeting with a business broker?

Know why you’re buying a business. It sounds basic but if there are multiple options you need to know your priorities.

Are you looking for something you’re personally interested in? Are you looking for the maximum return on your money. Are you just trying to keep yourself busy? Are you going to work there?

Why are you buying a business instead of starting one?

Why is the business being sold?

Do you want to grow the business, maintain it, or just keep the doors open?

Who’s working the business and what sorts of key positions will you need to continue running things? For most businesses, people are the biggest expense and the most valuable resource. Do the people who work the business now going to continue working there? Are they happy? Are they going to leave right after it’s sold/bought? Are they willing to sign on for a couple of years after you buy?

Does the business have any existing contracts? Either as existing work or widgets they’ll be paid for or existing obligations to vendors or services? For example are they signed up with an accounting firm? Outside tech support? A lawyer who gets a monthly retainer? How long are those contracts?

Is the business broker also an adviser you trust? You should probably have someone you trust (or several someones) do some research (due diligence) before you put any money in or sign anything. It should be fairly standard that the business will be able to provide some sort of financial information for you to look over.

It’s exciting stuff, good luck with it.

Dress so you look like you know what you’re doing: crisp, professional, confident. And grown up. If that’s you in your avatar picture, wear your hair up or back, not loose, and use makeup and accessories that make you look a little bit older.

Remember that you are the customer.

Do remember this is a broker and makes a living selling. Do you have a business plan? You should. You also should have the name of an attorney who will counsel you in this transaction, an accountant and a bank you will use. Having these things will make you less reliant on what this broker may also want to sell you as a package deal. Ask for at least 2 years of sales receipts, all expenses, rent costs, franchise fees, whether or not there is advertising or materials you are obligated to buy and 2 years of tax returns. Most of all see if you can zero in on your rate of return on your investment and when you will earn back your initial investment. Also, any and all considerations for employee costs and then ask yourself are you willing to not take a day off or vacation any time soon.

Do not offer a price first. Let the other person do it. Then negotiate down.
You are the customer. You’re the boss – not the broker, not the seller. You! And you are the one who needs to be wooed.

Thanks everyone for such thoughtful answers. I took all of them into consideration and found them to be most helpful. I appreciate them greatly.

@ Jeruba – your answer makes a ton of sense and I did exactly what you suggested. My avatar is me although that picture is over 7 years old. I like to be sorta anon on the Internet and always liked that pic. I still look quite young for my age though. The hair and makeup does help though. I like to wear my glasses too when I’m trying to look more grown up.