If you are looking at businesses for sale in Asia and think that the venture sounds interesting, then there are a series of key questions that you as the buyer should ask. This will make it easier to buy a business that meets your expectations. Likewise, if you are selling your business in Asia, then you should prepare answers for these questions as this will improve the chances of a successful business sale.
The first step prior to any ‘detailed’ exchange of information should be the preparation of a non-disclosure agreement. Your lawyer should assist you to prepare such an agreement that should ensure that both parties meet their obligations in terms of confidentiality. We would recommend that this is agreed fairly early in the process and this safeguards the seller of the business from potential competitors using the business sale for information gathering purposes.
Once, the non-disclosure agreement is in place we recommend the following questions be asked:
Why are you selling your business?
How many years have you been in business?
How many years have you been in business at the present location?
Did you create the business or did you buy it from someone else?
What is the legal structure of your business?
Do you have tax returns and financial statements that my accountant can look at?
Which bank do you do business with?
What types of insurance must your business carry?
What licenses are necessary to own and/or run this business?
How many hours did you work per week in your business?
How many employees do you have?
Do family members work in your business?
Will the family members stay after the sale?
Do you want be paid in installments or in full?
Will you stay and work for a while after the business is sold?
Do you have any long-term contracts or obligations to third-parties with the business?
Your accountant and lawyer can assist you with the questions themselves. The questions are critical whether you are looking at businesses for sale in Hong Kong or a business for sale in Indonesia or Saudi Arabia for that matter.