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