The questions, by stage

What does the business actually do, and for whom?

Good: A plain description of the work, the customers and how they pay.

Hides: A listing that leads with the opportunity and never says what the trucks do.

How is the earnings figure built?

Good: Seller's discretionary earnings, with the add-backs listed.

Hides: "Cash flow" or "profit" with no definition, which usually means the number is whatever made it largest.

How much of the revenue comes from the largest customer?

Good: A share, and a word about how long that customer has been there.

Hides: "Diversified" with no figure. The listing knows the number.

Does the business own or lease its premises, and what is left on the lease?

Good: The term, the renewal options and whether the lease transfers.

Hides: A lease that ends soon, or one in the owner's own name.

Why is the owner selling, and when do they want to be out?

Good: A specific reason and a timeline. Retirement, health, a move.

Hides: "Other interests." It may be true. It may be a business the owner is tired of fighting.

How long has it been on the market?

Good: A date, and what has happened since.

Hides: A relisted business with a new price and no explanation.

Would you tell me how the earnings figure was built, and what the add-backs are?

Good: A schedule, or an offer to walk through it on a call.

Hides: "It is all in the CIM after the NDA." Fair, but note whether they said what the number is made of.

What would a new owner need to be able to do on day one?

Good: An honest answer about the trade, the licenses and what the owner personally holds.

Hides: "Anyone could run it." Every owner-run business needs something on day one.

Who holds the customer relationships today?

Good: Names of roles. The owner, a foreman, a sales lead, or the customers themselves through contracts.

Hides: A pause. If the owner holds them all, that is the business you are buying.

Is the asking price open to structure, or is it cash at closing?

Good: A clear position on seller financing, earnouts and timing.

Hides: "Make an offer." A seller who has not thought about structure has not thought about selling.

Who else is involved in the decision?

Good: A spouse, a partner, a family member, an advisor. Named.

Hides: A seller who says nobody, then brings somebody to the second call.

Walk me through a normal week. Where does your time go?

Good: A detailed answer that reveals what the owner does that nobody else can.

Hides: A tidy answer. Nobody's week is tidy.

What happened the last time you took two weeks off?

Good: Specifics. Who covered what, what waited, what went wrong.

Hides: "I never have." That is the honest version of "it needs me every day."

Which customers would you worry about if you left tomorrow?

Good: Names or types, and why.

Hides: "None of them." Some of them would.

Which of your people would you most want a buyer to keep, and why?

Good: A short list with reasons. The people who make the place run.

Hides: A seller who cannot name anyone, or who names everyone.

What has changed in the business in the last three years?

Good: Revenue, people, customers, costs, with reasons.

Hides: "Nothing." Something always has.

What do you expect a buyer to bring that you did not?

Good: A view of what the business needs next. Energy, capital, a skill, a plan.

Hides: A seller who has not thought about what happens after them.

What would make you say no to a buyer?

Good: A clear line. Firing the crew, moving it, changing the name.

Hides: "The price is the price." That seller is not choosing a person, and you are not being chosen.

May I see three years of monthly statements, not just the annual figures?

Good: Yes, and the statements show the shape of the year.

Hides: Annual figures only. Seasonality and a bad quarter both disappear in an annual figure.

Can each add-back be documented?

Good: Receipts, payroll records, a note per item.

Hides: An add-back schedule that exists only as a list. The undocumented ones are not earnings.

What does the tax return show, and how does it reconcile to the statements?

Good: A reconciliation, with the differences explained.

Hides: A gap nobody can explain. Lenders will not accept it either.

Who are the top ten customers by revenue, and how long has each been a customer?

Good: A list without names, with tenure and share.

Hides: A refusal. Under an NDA this is a normal question.

What contracts, licenses and permits does the business depend on, and which transfer?

Good: A list with the transfer position on each.

Hides: A license in the owner's name that the buyer would have to earn themselves.

What is the condition of the equipment and vehicles, and what needs replacing in the next two years?

Good: A list with ages and a candid view of what is tired.

Hides: "Everything is in great shape." Ask for the maintenance records.

Has the business been through any lawsuit, claim, audit or regulatory action?

Good: A straight answer, including the resolved ones.

Hides: Anything that surfaces later in diligence that should have surfaced here.

Which parts of the letter of intent are binding, and until when?

Good: Exclusivity and confidentiality, with dates. Everything else open.

Hides: Terms a buyer did not know they had agreed to.

What happens to the receivables and payables on the day of closing?

Good: A clear position. Usually the seller keeps what is owed to them and pays what they owe.

Hides: A buyer who opens on day one with the bills and none of the cash.

How will working capital be handled in the price?

Good: A target and a true-up mechanism, or an explicit statement that none is included.

Hides: A price that assumes the business comes with cash in it when it does not.

What is the seller's position on carrying a note, and on the standby terms a lender may require?

Good: A number, a rate, a term, and awareness that a lender has rules about it.

Hides: A seller who agrees to a note and has not been told it may sit on standby.

How long will you stay after closing, and doing what?

Good: A period, a role, and what the seller will hand over in it.

Hides: A seller who wants to be gone the same week the keys change hands.

What has changed in the business since the letter of intent was signed?

Good: An update. A lost customer, a hire, a price change.

Hides: Silence until diligence finds it.

Do the bank statements match the profit and loss statements, month by month?

Good: Yes, with small timing differences explained.

Hides: Revenue that is on the statements and not in the bank.

Are the employees classified correctly, and is anyone owed anything?

Good: Payroll records that match the roster, and a clean answer on contractors and overtime.

Hides: A crew of contractors who are really employees.

What does the business carry in insurance, and what has it claimed?

Good: Policies and a claims history.

Hides: A gap in coverage, or a claim that says something about how the place is run.

Will the landlord assign the lease, and on what terms?

Good: A conversation with the landlord already had, and a term the lender will accept.

Hides: A landlord nobody has spoken to.

What is the quality of earnings review likely to find?

Good: The seller knows their weak spots and names them.

Hides: A seller who has never had anyone look hard at the numbers.

If something diligence finds changes the price, how do we handle it?

Good: A willingness to talk, and a distinction between a real finding and a tactic.

Hides: A seller who will not reopen anything, or a buyer planning a retrade from the start.

What would you tell the staff, and when?

Good: A plan agreed between buyer and seller.

Hides: A crew who find out from somebody else.

Have they read what I wrote, or are they writing to everyone?

Good: A message that names something specific about the business.

Hides: A message that could have gone to any listing in the state.

What would they do with it?

Good: A plan, even a rough one. Keep the crew, keep the name, grow this part.

Hides: Nothing about the business after the sale. That buyer is buying a number.

Can they pay for it?

Good: A word about financing. Their own money, a lender they have spoken to, an interest in seller financing said plainly.

Hides: No mention of money at all, or a question about seller financing before any other question.

Have they run anything?

Good: Something. A crew, a department, a smaller business. Not necessarily this trade.

Hides: A buyer who has only ever been managed.

Why this business, and why now?

Good: A reason that connects to their life and to what the business is.

Hides: "It looked profitable." Every listing looks profitable.

What happens to my people?

Good: A direct answer. Who stays, what changes, how they would earn the crew's trust.

Hides: "We will see." The crew will hear that as "some of you go."

What would you change, and what would you leave alone?

Good: A view. They have thought about the business as it is, not as a spreadsheet.

Hides: "Nothing" or "everything." Neither has thought about it.

Who else is involved in your decision?

Good: A spouse, a partner, an investor, a lender. Named.

Hides: Someone who appears on the second call and asks all the questions.

What would make you walk away?

Good: A clear line. The numbers not holding up, the lease not transferring.

Hides: "Nothing." A buyer who cannot say no is not a buyer who has thought it through.

Will you sign the non-disclosure agreement as written?

Good: Yes, or a specific objection an attorney can talk through.

Hides: A buyer who wants the books first and the paperwork later.

Have you spoken to a lender, and what did they say?

Good: A prequalification, a name, a range.

Hides: "I will sort out financing once we agree a price." That is backwards.

Are you looking at other businesses, and where are you with them?

Good: An honest answer. Serious buyers usually are.

Hides: A buyer who is under a letter of intent elsewhere and has not said so.

What do you expect to find in the numbers that would worry you?

Good: The right worries. Owner dependence, customer concentration, add-backs.

Hides: A buyer who does not know what to look for, and will be led by whoever they hire.

What is the price made of, and when does each part arrive?

Good: Cash at closing, a note, and any part that depends on something later, each named.

Hides: A headline number that is mostly a note or an earnout.

If the lender's rules change the structure, what gives?

Good: An understanding that a seller note may need to sit on standby, and a plan for it.

Hides: A buyer who has not asked their lender what a seller note has to look like.

How long do you want me to stay, and doing what?

Good: A period and a role, matched to what the business needs handed over.

Hides: A buyer who wants a two-week handover of a business that took twenty years to build.

What have you told your own people, and your lender, about what you would do here?

Good: A plan they have written down and shown someone.

Hides: A plan that exists only in the conversation with you.

If diligence finds something, how will you raise it?

Good: Straight away, with the finding, and a conversation rather than a demand.

Hides: A buyer who is already planning to come back with a lower number.