10 Questions to Ask When Considering a Small Business Purchase

1. Why Is the Business for Sale?

This is the first and arguably most important question to ask. The seller’s reason for exiting can reveal a lot about the business’s stability and future. If the owner is retiring, relocating, or moving on to a new venture, it often suggests the company is healthy. But if the sale is rushed or vague, underlying problems such as declining revenue, competitive pressures, or unresolved legal disputes may exist.

A transparent and logical explanation for the sale typically signals a sound opportunity in a market like Boston, where businesses often change hands due to generational transitions or strategic acquisitions.

2. What Is the Business’s Financial History?

To evaluate whether a business is worth buying, you must thoroughly examine its financial track record. Request documents such as profit and loss statements, tax returns, balance sheets, and cash flow reports from the past three to five years. These documents will help you assess the company’s revenue consistency, profit margins, and cash flow stability.

Keep in mind that lenders, especially those backing SBA loans, will closely scrutinize these financials. If you're planning to buy a business in Massachusetts through financing, having clean, well-organized financial statements is critical to your due diligence and loan approval.

3. What Assets and Liabilities Will I Be Assuming?

A business is more than its revenue. Before finalizing a deal, you need to know exactly what assets are included—equipment, inventory, intellectual property, and real estate—and whether you’re assuming any liabilities. This can consist of vendor debts, pending lawsuits, or equipment leases.

For example, in Boston, some businesses operate in historic buildings with specific lease obligations or property restrictions. If you’re buying a retail business in the North End or Back Bay, make sure you understand the terms and responsibilities that come with the location.

4. Who Are the Customers and What Is the Revenue Model?

Understanding where the business’s income comes from—and who it comes from—is critical. Ask whether revenue is built on recurring client contracts, one-time sales, or seasonal income. If one client accounts for a large percentage of revenue, losing them post-sale could have a significant impact.

Also, inquire about the customer demographics. For instance, is the clientele predominantly local, tourists, or corporate accounts? A well-diversified customer base reduces risk and enhances the long-term value of the business you're considering.

5. What Is the Competitive Landscape?

Before investing in a business, understand its competitors and how it stands out in the market. Is there a strong value proposition that makes it unique? How saturated is the industry in the region?

In Boston, industries such as hospitality, wellness, and tech are booming but also highly competitive. Use this question to evaluate the business's current market share and whether there’s room to grow. Searching for other listings under business for sale in Boston can also help you compare offerings and spot patterns in pricing and positioning.

6. What Role Does the Owner Play in Daily Operations?

Many small businesses are heavily reliant on the owner's involvement. If the seller handles everything from sales and inventory to customer relationships, transitioning ownership may be difficult. Ask about the owner’s day-to-day responsibilities and whether those can be easily transferred.

Ideally, the business has an experienced team and documented operating procedures, allowing a seamless transition. The less dependent the company is on the seller, the more valuable—and sustainable—it becomes after the sale.

7. Is There Room for Growth or Expansion?

A business that is already successful and still has room for growth is a prime target for buyers. Ask what the current owner has done to grow the company and what opportunities remain untapped. This might include launching new product lines, expanding into online sales, adding delivery options, or opening new locations.

If you're looking to buy a business in Massachusetts and scale it, Boston offers great growth potential—especially in areas like Cambridge, Somerville, and the South End, where young professionals and entrepreneurs are reshaping the local economy.

8. What Are the Terms of the Lease or Property Ownership?

Understanding the lease terms is essential if the business occupies a physical location. Find out how much time is left on the lease, whether it’s transferable, and if there are any escalations or renewal options. If the property is included in the sale, be sure to evaluate its current market value.

In Boston’s high-demand real estate market, commercial leases can be complex and expensive. Make sure the terms align with your financial goals and business plan. Consulting with a commercial real estate attorney is often worthwhile at this stage.

9. What Staffing Structure Is in Place?

A business is only as strong as its team. Ask about the current staff’s roles, compensation, length of employment, and whether they plan to stay on after the sale. High turnover or lack of leadership can be problematic, while a stable, well-trained team adds tremendous value.

Also, consider whether any union relationships or special employment contracts are in place. In Massachusetts, local employment laws and benefits obligations (like sick leave or minimum wage requirements) can vary, so a clear understanding of labor obligations is necessary.

10. What Is the Business’s Reputation—Online and Offline?

A business’s reputation can influence your success from day one. Look into online reviews, ratings on Google and Yelp, and social media presence. A strong digital footprint and loyal customer base are indicators of brand equity.

Ask the seller how the business is viewed in the community and whether there are any public relations issues. A business for sale in Boston with strong local support and positive press coverage will be easier to promote, scale, and grow under new ownership.

Bonus: What Post-Sale Support Will Be Provided?

Many buyers overlook the importance of post-sale support. Will the seller provide hands-on training? Will they introduce you to key clients, vendors, and employees? What kind of support is available during the handover period?

A structured transition plan of 30 to 90 days is typical. The more involved and cooperative the seller is post-sale, the smoother the transition, and the more likely you are to retain clients and revenue.

All About Boston, Massachusetts

When considering the purchase of a small business, location matters just as much as financials, and Boston, Massachusetts, offers the perfect blend of economic opportunity, cultural richness, and livability. As one of the oldest cities in the United States, Boston is a vibrant hub for business innovation, education, healthcare, and technology. It consistently ranks among the top cities for entrepreneurs, professionals, and families.

A Thriving Economy with Deep Roots

Boston’s economy is both diverse and resilient. Supported by world-renowned institutions like Harvard, MIT, and Massachusetts General Hospital, the city thrives across the biotech, finance, real estate, education, and hospitality sectors. For buyers looking at a business for sale in Boston, you will find that economic diversity translates into a wide range of opportunities and a stable investment climate.

Local and state support for small businesses is strong, with numerous resources available through the City of Boston, the Massachusetts Small Business Development Center (MSBDC), and area chambers of commerce.

A Family-Friendly Urban Lifestyle

Despite being a major city, Boston retains a welcoming, neighborhood-focused feel. Family-friendly communities like Jamaica Plain, Roslindale, and West Roxbury offer top-rated public schools, parks, libraries, and community events. Many areas provide a suburban feel within city limits, with walkable streets, safety, and a strong sense of community.

Access to public transportation by the MBTA, affectionately called ("the T") makes commuting manageable, and the city’s investment in green spaces, such as the Emerald Necklace park system, offers families a refreshing urban-outdoors balance.

Rich in Culture, History, and Innovation

Boston’s appeal extends beyond the business world. It’s a city with cobblestone streets that meet modern startups. Cultural space is shared in Fenway Park with the Boston Symphony Orchestra. Divercity surrounds vibrant farmers markets, food halls, and innovation labs. 

Whether you’re raising a family or investing in a business, Boston’s blend of history and progress creates a unique environment for growth.

For aspiring entrepreneurs and seasoned investors buying a business in Massachusetts, (especially in Boston), offers more than financial return. It’s an opportunity to be part of a community rooted in legacy and innovation.

The decision to buy a small business should never be rushed. By asking these 10 essential questions—and truly understanding the answers—you’ll dramatically reduce your risk and increase your odds of long-term success. Whether exploring your first acquisition or adding to an existing portfolio, due diligence is your most valuable tool.

If you're ready to take the next step toward business ownership, our team at First Choice Business Brokers Boston is here to help. We specialize in assisting entrepreneurs in finding the right business for sale in Boston and provide expert guidance through every transaction phase.

Let’s Talk About Your Goals

Thinking of making the leap to buy a business in Massachusetts? Schedule a free consultation with one of our experienced brokers. We’ll help you evaluate listings, negotiate the best terms, and navigate the due diligence process with confidence.

Your next chapter starts now—make it a smart one.

The information provided in this article is for general informational purposes only and is not intended as legal, financial, or tax advice. Readers are encouraged to consult with licensed professionals, including attorneys, accountants, and financial advisors, before making any decisions related to purchasing a business. First Choice Business Brokers does not provide legal services and does not represent buyers or sellers in a legal capacity.