The Process of Selling a Business

Once listed, our marketing efforts produce inquiries from potential buyers. From the initial inquiry the selling process generally takes the following form:

1. Confidentiality Agreement
2. Buyers examination of documents
3. Preliminary discussions
4. Offer to purchase
5. Purchase and sale agreement
6. Closing

1. The buyer signs a Confidentiality Agreement. At this time it is also appropriate for the buyer to show evidence of his financial background. He may do this by submitting a Personal Financial Statement or a supporting letter from his bank qualifying the buyer financially.

2. This is a buyers initial examination of documents such as business summary, tax returns and profit and loss statements.

3. In a face to face meeting buyer and seller discuss various aspects of the business; marketing practices, competition, ways to grow the company. The seller may also relate his reasons for selling ( one of the first questions a buyer will ask ) and the buyer can describe how his business background has equipped him to successfully operate the business.

4. An Offer to Purchase is an attempt to arrive at a satisfactory selling price and a general agreement outlining the terms and conditions under which a transfer of the business will take place.

5. A Purchase and Sale Agreement formalizes the deal. This document will encompass the elements of the offer to purchase and will detail other factors that may have arisen during negotiations.

6. Closing. Throughout the complex process from preparation to purchase and sale agreement, your goal has been to arrive at the closing.

Throughout the selling process, keep running your business. Don't allow revenues to slip or an important customer to be ignored. Your business may sell quickly or it may take longer than wished. However, at all times, you must be able to present your business as an ongoing, successful, and profitable operation.