How do I find out why the vendor is selling and test the answer?

A seller’s stated reason is a claim, not a fact. BDC’s guidance for sellers lists health issues, financial trouble and coming market or technological change among the reasons owners sell, and notes that a seller’s reasons will likely influence what they want out of the deal. Those motives can shape what the owner asks for, so they are worth understanding and checking.

Ask early, and ask more than once

Put the question to the owner at the first conversation and again once you have read the records. Ask follow-ups about timing: why now, what changed, and what they plan to do next. Check whether the answers stay consistent across conversations. Note anyone else who gives a reason, such as a manager or a long-standing customer, and compare it.

Test the story against the records

BDC’s due diligence guidance says you and your accountant should be given accountant-prepared year-end financial statements covering several past years, along with tax returns, to review. It suggests asking whether the figures match what the owner tells you and whether the tax returns match the financial statements. If the reason given is retirement, ask whether the numbers look like those of a healthy business. If it is burnout or market change, look for the trend that would explain it.

Watch for what the owner cannot explain

BDC says that if sales are trending downward and the vendor cannot convincingly explain why, you may need to rethink the transaction. It adds that if the seller cannot provide the documents you request, you may have a chance to renegotiate the price. A weak explanation is a reason to ask more questions, not proof of a problem. Our page on missing corporate records covers one version of this.