Three Questions to Ask Before You Ever Look at the Financials
Owners considering a sale often prepare for the moment a buyer opens the books. That moment matters, but by the time it happens, most of your view of the business should already be formed. It comes from three questions worth asking early, in conversation, before anyone pulls up a spreadsheet.
1. "What do you wish you'd had time to fix?"
Every owner running a business day-to-day has a mental list of things that annoy them — a process that's clunky, a system that's outdated, a part of the operation that works but not well. Most of them have never had the time, capital, or headcount to actually address it. That list is one of the most valuable things an owner can hand you, because it's usually a map of where you can create value quickly, without reinventing anything that's already working.
2. "What would break if you took a month off?"
This question tells you more about the real structure of a business than almost anything else. If the honest answer is "everything," that's not a dealbreaker, but it means you're buying a role, not just a company, and your transition plan needs to account for that. If the answer is "not much," that's a sign the business has real systems and a team that can operate independently — which usually means a smoother transition and a more durable asset.
3. "Who besides you understands how this actually runs?"
Every business has a version of institutional knowledge that never made it into a manual — the vendor who'll work a rush order if you ask the right way, the customer who needs a certain kind of handling, the small workaround that makes an old system function. You want to know how much of that knowledge lives with one person, and how much of it is actually shared across the team. It's a direct proxy for how much risk sits in the transition.
Why lead with these
Financials tell you what a business has done. These three questions tell you what it's capable of doing next, and how much work that's going to take. Owners who can answer them clearly and honestly — even when the honest answer isn't flattering — are usually the easiest to do a deal with, because you're starting from the same picture of the business rather than one built entirely from a P&L.
If you're an owner thinking about a sale down the line, these are worth sitting with now. They're a good gut check on what you've actually built, independent of what it's currently earning.
