As Seen in NNBW: Buyers should focus on a handful of critical issues

By Buzz Harris

The other day, I was flipping through an industry trade magazine when I came across an article about “what the average small business purchase involves.” According to the author, buyers should ask 76 “critical” questions, investigate 200 “individual” points, negotiate 54 “specific” clauses, and review 71 “key” issues. After I picked my jaw off the floor, I read on — only to find out the article wasn’t about helping buyers. It was a sales pitch for the author’s book.

 

Still, it got me thinking about what real buyers focus on when evaluating a business.

 

1. Proven Profitability & Financing

Nearly every buyer starts with the numbers. They want a business with a solid history of positive net income. Just as important are financing terms that allow them to comfortably service the debt and still earn a healthy profit afterward.

2. Strategic Position & Industry Outlook

Next comes the big-picture view. How stable and essential is the industry? Where is the market headed? What are the company’s strengths, weaknesses, opportunities, and threats—and how do they stack up against the competition?

3. Operational Realities

Once the strategic picture is clear, buyers dig into operations. Who are the key employees? What processes can be streamlined? Where can economies of scale be leveraged? Which products or services are most profitable—and which should be cut loose?

4. The Human Factor

A deal is more than numbers. Trust, transparency, and mutual respect between buyer and seller are critical. When that trust erodes, the transaction can unravel quickly.

5. Contractual Protections

Finally, buyers look to the purchase agreement to safeguard their interests. This might include:

• A due diligence period to verify financials.

• A requirement that the seller operate the business as usual until closing.

• Lease contingencies—either assuming the existing lease or signing a new one.

• Indemnification against liabilities from the seller’s prior operations.

 

These protections ensure buyers aren’t inheriting problems they didn’t create. Of course, this list isn’t exhaustive — but it covers the essentials.

 

As for that original article, I’m just glad it focused on small business purchases. If it had been about medium or large deals, the sheer volume of “critical” points might have redefined the phrase paralysis by analysis.

 

Read the full article in NNBW here.