Steps to Selling a Business

  1. Initial Interview with Broker
    1. Seller and Broker information exchange
    2. Mutual decision made to proceed with Business Valuation, Estimate of Market Value or Business Consulting
    3. Appointment set for next meeting
  2. Implementation of Plan Identified in 1.b.
    1. In-depth business interview
    2. Review of financial information
    3. Review of other relevant information
      1. Lease
      2. Business Contracts
      3. Business Asset Analysis
        1. Tangible
        2. Intangible
      4. Present and discuss business analysis
      5. Mutual agreement made to continue working relationship
  3. Engagement Agreement
    1. Review of Engagement Contract
      1. Execute Contract
      2. Complete Business Questionnaire
  4. Prospectus Preparation
    1. Broker prepares business prospectus
    2. Seller critiques business prospectus, changes made
  5. Marketing of Business
    1. Broker and Seller discuss marketing strategies
    2. Seller provides industry information/publications
    3. Broker implements tailor-made marketing plan
  6. Buyer Evaluation and Qualification
    1. Broker interviews prospective Buyers
      1. Buyer signs Confidentiality Agreement to protect confidentiality
      2. Buyer Signs Brokerage Disclosure acknowledging Seller representation
      3. Financial qualification is received from Buyer
      4. Proceed with Buyer if financial ability and technical skills are deemed a match for the selected business
      5. Buyer is provided preliminary information on Seller’s business
  7. Buyer Focuses on Seller’s Business
    1. Buyer is provided detailed business information, including tax returns
    2. Buyer researches industry and specific business confidentially
    3. Buyer investigates financing options
  8. Seller and Buyer Meeting
    1. Meet at the business at a time acceptable to Seller
    2. Tour of the business
    3. Exchange of personal and business information
  9. Additional Information Provided to Buyer
    1. Information relevant to pricing and decision making process
    2. Verification of information provided occurs during the due diligence process
  10. Letter of Intent (LOI)
    1. Buyer submits Letter of Intent
      1. Outline of negotiable and relevant points of offer
      2. Defines the contingencies which must be satisfied
      3. Timing of transaction defined
      4. Refundable Earnest Money is included as a goodwill gesture
    2. Broker presents the LOI to the Seller
    3. Seller accepts, rejects or counters the LOI
      1. If offer is countered, resolution is negotiated through Broker
      2. Earnest Money is deposited in Broker’s trust account following written acceptance of LOI
  11. Asset or Stock Purchase Agreement first draft is prepared by Broker and presented to Buyer for attorney and accountant review
    1. Buyer/Advisors present changes to Broker
    2. Broker reviews amended Agreement with Seller/Advisors
    3. Seller/Advisors present changes to Broker
    4. Mutually acceptable Agreement is signed by the parties with Exhibits attached
  12. Steps To Closing
    1. Seller, Buyer and Broker determine timeline and prioritization of events necessary for Closing
    2. The Due Diligence Process
      1. Buyer/Advisors present a list of due diligence requirements
        1. Financials
        2. Premises inspections
          1. Health Department
          2. Fire Department
          3. Environmental Analysis
          4. Other
        3. Company contracts or agreements, including leases for real and/or personal property
        4. Tangible Asset review
          1. Furniture, Fixtures and Equipment
          2. Inventory
          3. Leasehold Improvements
        5. Patents or intellectual property
        6. Licensing
        7. Employees or Company operations
        8. Other
      2. Buyer creditworthiness, if applicable
        1. Buyer provides Seller with financial statement
        2. Broker obtains Buyer’s credit report for Seller
        3. Seller determines creditworthiness of Buyer
      3. Due Diligence findings are reported to Broker within defined timeline
        1. Concerns are resolved between the Parties
    3. Transfer of Leases, Contracts, Licenses and Franchise Rights
      1. The Parties work together to transfer any contract rights or obligations
      2. Continuing Seller obligations determined/negotiated on an individual basis
    4. Financing
      1. Broker assists Buyer in obtaining financing
    5. Final Inventory is taken the day before Closing
  13. The Closing
    1. Broker works with the Parties/Advisors and Closing Escrow Attorney to prepare closing documents, release liens and formalize the business sale
    2. Costs to Seller
      1. Personal Advisor fees
      2. Taxes as determined by Accountant
      3. Escrow Attorney Fee $750 – $1,500
      4. Prorations at Closing
      5. Broker’s Fee
      6. Debt Payoff
      7. Other, as applicable
    3. Parties sign Closing Documents