The selling of your business requires a certain sequence of events that need to occur to allow a smooth organized process. Selling of your business IS a process, and requires an organized planned out approach.
There is considerable effort that goes into the process of buying or selling a business. The process requires not only persistent efforts of both the Buyer and Seller, but also cooperation with respective attorneys, accountants, and or adviser’s.
Below is a summary of those 8 Steps Necessary in the process of selling your business.
- A potential Buyer is identified. This is not always an easy process
- Seller gathers information. Seller shall gather Buyers information, capabilities and signed Non-Disclosure, Confidentiality Agreement to assist in a preliminary qualifying of Buyer.
- 1st Meeting between Buyer/Seller. Seller/Buyer exchange further information to respectively determine if the other party appears to meet their needs. A site visit that occurs at the Sellers place of business may occur after a first meeting.
- Letter of Intent (LOI). LOI or purchase Contract is drafted and presented from the buyer to the selling. Intent, contingencies, escapee clauses for respective parties are defined. And essentially these documents executed, state an intent by the parties to proceed and consummate the deal contingent upon terms defined and due diligence. The following items at a minimum are addressed in the LOI or purchase contract. The purchase price/ consideration, description of what is being purchased, how it shall be purchase, and other related terms and conditions of the purchase.
- Respective Due Diligence and Discovery. This is performed by both the Buyer and Seller. (this can take an extended amount of time and effort)
- Negotiations. Occur most every step along the way.
- Purchase documents are drafted. Initial executed LOI, or the Purchase contract terms and conditions are the basis of this document. Real estate, and or lease docs and all transfer related documents are organized and prepared.
- Closing. All documents contracts and agreements are signed and executed. The Buyers attorney that is assisting in the legal aspects of the sale can provide a book with all closing documents related to the sale included. Funds/consideration is exchanged.
Scott M Messinger
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