Seven questions to ask any buyer before you sell.

I am looking to buy an established fire and security business in London and the South East. You should ask these seven questions of anyone who wants to buy yours, including me. If a buyer squirms at any of them, you have learned something worth knowing, and it cost you one phone call. Ben Stammers, Stammers Group

1.Who actually makes the decision, and will I meet them?

Many approaches come from buyers where the person charming you cannot say yes. Behind them sits an investment committee, and everything agreed across your table can be unagreed in a meeting you will never attend.

A good answer names the person. Better still, you have already met them, and they answer their own phone.

2.Where is the money coming from, and can you show me before I show you my numbers?

Anyone can write a letter. Fewer can complete. A deal that dies for funding after months of diligence costs you a year of momentum and your appetite for ever trying again.

A good answer is specific: whose money it is, what is confirmed, and what they can show your accountant, in writing, early. Be wary of a buyer whose funding “will be arranged once we agree terms”.

3.What exactly happens to my staff and my name, and will you put it in the heads of terms?

Every buyer says the right things about your people. The question is whether they will write them down where you can enforce them. Warm words in a meeting are not a commitment; a line in the heads of terms is.

A good answer volunteers the paper before you ask.

4.How did you get to your number?

Two buyers can offer the same headline and mean very different money. Ask to see the working: what profit figure they used, what they added back, what they deducted. One honest thing you should expect: a serious buyer prices on profit after the cost of replacing you, because someone will have to do your job when you are gone. A broker’s “adjusted profit” often quietly puts your unpaid hours back into the profit line; a buyer’s price quietly takes them out again. Neither is wicked, but you want it shown, not smuggled.

A good answer is arithmetic on paper that your accountant can pull apart line by line.

5.What are the dates, and what happens if they slip?

An open-ended process is a negotiating tactic: the longer it runs, the more tired you get, and tired sellers accept late price chips. You are entitled to a timetable at the start: offer by when, diligence over what period, completion when.

A good answer has dates in it before you ask, and tells you plainly what happens if one is missed.

6.How much is paid on completion, and what does the rest depend on?

Almost no buyer pays everything on the day, and that is normal. What matters is the shape of the rest. Fixed sums on fixed dates are a promise. Payments that depend on future targets, an earn-out, move the risk of the business back onto you after you have handed over the controls. Sometimes that is fair, if you are staying to drive the results. If you are leaving, be careful: you would be betting your money on someone else’s driving.

A good answer separates the two honestly and never dresses a target up as a promise.

7.What happens if I change my mind, and what does exclusivity commit me to?

At some point a buyer will ask for exclusivity: a period where you talk only to them. That is reasonable, they are about to spend money on lawyers and accountants. But know its length, know what happens when it ends, and know what you owe if you walk away. The answer should be: it ends on a date, and you owe nothing.

A good answer treats your right to change your mind as normal, not as a betrayal. A buyer who bristles at this question is showing you how they will behave in month three.