Questions to Ask Before Buying a Business in Singapore

The questions you ask a seller before making an offer determine whether you pay a fair price for a real business or overpay for a story. Fifteen questions, grouped under five categories, cover the ground that separates informed buyers from hopeful ones: the financials, the lease, the staff, the equipment, and the reason for sale. A seller who answers clearly and with documentation is a seller you can negotiate with. A seller who deflects is telling you something the listing did not.

The quality of the seller's answers tells you as much as the answers themselves.

Revenue and costs

1. What is your average monthly revenue, and can you show me the records?

Ask for POS reports and bank statements covering at least three months. The number the seller quotes should match what the documents show. A verbal figure with no documentation is not evidence. It is an opening position.

2. What are your monthly fixed costs?

Rent, utilities, insurance, loan repayments, any recurring software or platform fees. Add them up and subtract from the revenue to see the real margin. A business that sounds profitable on revenue can be marginal once the fixed costs are visible.

3. What percentage of sales is cash versus cashless?

A high cash ratio means a larger share of revenue that cannot be independently verified through bank records. It is not a dealbreaker, but it changes how much confidence you can have in the stated figures. Cashless transactions create a verifiable trail.

For how to cross-check revenue claims document by document, see our guide to business takeover fees in Singapore.

The lease

4. How many months are left on the lease, and is there a renewal option?

The remaining lease sets the horizon for your investment. A two-year lease with a renewal clause is a different proposition from an eight-month lease with no guarantee. Every dollar of fit-out and equipment is locked into premises you may have to leave.

5. What is the current rent, and when is the next review?

A tenancy that resets to market rate at the next review may jump from S$3,000 to S$4,500. That increase changes the profit the takeover fee was priced on. Ask when the last increase happened and what the landlord indicated about the next one.

6. Has the landlord agreed to the lease assignment?

Most commercial tenancies in Singapore require the landlord's written consent to transfer the lease. A seller who has not discussed this with the landlord is asking you to commit to a deal that may not be deliverable. This question should come early, not late.

Staff and operations

7. How many staff work here, and will they stay after the handover?

Under the Employment Act, staff contracts transfer automatically. But a contract does not stop someone from resigning. Ask which staff are staying, check their notice periods, and meet them before you agree the price. In salons, tuition centres, and restaurants, the staff are the revenue.

8. Are any staff on commission, bonus, or non-standard terms?

A commission structure that worked for the outgoing owner may not work for you. Bonus obligations carry over. Non-standard hours or arrangements that were agreed verbally may create disputes after the handover. Get every employment term documented.

9. What does a typical operating day look like?

This open-ended question reveals how dependent the business is on the owner. If the answer involves the owner doing everything from opening to closing, you are inheriting a job, not a business. If the answer describes a team that runs without the owner present, the goodwill is more portable.

Equipment and assets

10. Is all the equipment owned outright, or is any of it leased?

Leased or rented equipment does not transfer with the sale. A takeover fee that includes a S$15,000 chiller on a rental contract is charging you for something you will not own. Ask for proof of ownership for every major item.

11. How old is the major equipment, and when was it last serviced?

A commercial washer near the end of its 10-year life is a replacement bill, not an asset. A kitchen exhaust system that has not been serviced in two years is a fire risk. Age and maintenance history set the real value of the equipment, not the purchase price the seller originally paid.

12. What is included in the takeover fee, and what is not?

Get a written list. Equipment, furniture, signage, POS system, deposit transfer, stock (if any), delivery platform accounts, supplier contacts, domain name, social media accounts. Anything not on the list is not included, regardless of what was said during the viewing.

Reason for sale and handover

13. Why are you selling?

Listen for clarity and consistency. Retirement, relocation, burnout, or a new venture are straightforward. A vague answer, a shifting story, or obvious discomfort with the question suggests the real reason is something the seller does not want to disclose. The reason for sale colours everything else.

14. How long has the business been listed, and have there been other offers?

A listing that has been active for six months with no buyer may signal a pricing problem, a landlord issue, or something previous buyers discovered during due diligence. It may also simply reflect a niche business in a thin market. The answer helps you calibrate your negotiating position.

15. Will you stay for a transition period after handover?

A week or two of the seller working alongside you, introducing suppliers, showing the routine, and answering questions is invaluable. Negotiate this before you sign, because once the seller has received full payment there is no obligation to help. A seller who flatly refuses any transition is unusual and worth questioning.

When you are ready to apply these questions, browse businesses for sale on SG Business Mart and enquire directly with owners. Every listing connects you to the seller with no broker in between.

Frequently asked questions

What is the most important question to ask a seller?

Ask for documented proof of revenue: POS reports, bank statements, or IRAS filings covering at least three months. Everything else, from valuation to whether the takeover fee is fair, depends on whether the revenue is real. Without verified numbers, every other answer the seller gives is ungrounded.

Should I ask why the seller is leaving?

Yes. The reason for sale shapes how you evaluate everything else. Retirement, relocation, or a new venture are neutral reasons. A seller who is vague, contradictory, or reluctant to explain may be exiting because of problems the listing does not mention.

How many questions should I ask at the first viewing?

Focus on five to seven key questions at the first viewing: reason for sale, approximate revenue, lease details, what is included, and whether staff will stay. Save the detailed financial verification for after you have decided the opportunity is worth pursuing. Overwhelming a seller with fifteen questions on the first visit can shut down the conversation.

Can I ask to speak with the staff before buying?

Yes, and you should. In staff-dependent businesses like salons and tuition centres, meeting the team before agreeing the price tells you whether the people who generate the revenue plan to stay. A seller who blocks access to staff before the deal is worth questioning.

What if the seller cannot answer my questions?

A seller who does not know their own revenue, lease terms, or equipment details is either disengaged from the business or withholding information. Neither is reassuring. Inability to answer basic questions is itself a signal about the quality of what you are buying.

Should I put the seller's answers in writing?

Yes. After the viewing, send a summary of what the seller told you by email or message and ask them to confirm. Written confirmation of revenue, lease terms, and what is included creates a record you can reference if the terms change later.