Step 1: Initial Free Consultation
The selling process begins with a face-to-face consultation with one of our Preferred Business Brokers and the Seller. During this consultation, both parties will be required to sign a Non-Disclosure Agreement (NDA). An NDA is an agreement that legally creates a confidential relationship between the Business Broker and the Seller. It is designed to protect the Seller's proprietary information and trade secrets. When the NDA is signed, the Business Broker and the Seller can begin introductions to learn more about each other and answer any questions.
Step 2: Provide Documents
After the initial consultation, the Business Broker will request a variety of documents to be submitted by the Seller that are necessary to determine the Seller's Most Probable Selling Price (MPSP). The MPSP is an estimate of the value of the business based on a variety of factors including industry trends, financial records, tax returns, inventory, leases, payables and contracts.
What documents are required?
- Completed Seller's Questionnaire
- Financial Statements -- last 3 to 5 Years
- Executed Lease
- Articles of Incorporation
- List of Equipment (Included and Excluded) in the Sale
Step 3: Calculation of Most Probable Selling Price (MPSP)
After receiving the required documents from the Seller, the Business Broker has a team of professional accountants and analysts that will review the financials and prepare a Normalized Income Statement. Once the Normalized Income Statement is prepared, the Business Broker will calculate a MPSP and provide the seller with a MPSP range to be reviewed and agreed on by the Seller.
Step 4: Signing the Engagement Agreement
When the listing price is agreed upon, both the Business Broker and the Seller then enter into an official relationship by signing the Engagement Agreement. This agreement describes the legal business relationship the Seller will be entering into with the Business Broker along with the relevant terms and conditions.
Step 5: Onboarding
At this point, the Seller has committed to moving forward with selling their business. Further documents will be requested from the Seller including legal, financial and tax documentation that will be required during Step 9: Due Diligence and Contingencies. The due diligence process takes place shortly before the sale goes through and allows the Buyer to verify the details about the Seller's business. In the meantime, these documents will be organized and stored in a secure data room that is only available to the Business Broker so that the team can learn more about the business for sale and best serve the Seller.
Step 6: Marketing Your Business
After all information is approved, a teaser about the business will be marketed to a database of over 85,000 interested Buyers in collaboration with the BizON marketplace, in addition to being distributed to a variety of online and print marketing platforms including social media, websites, magazines and more. A teaser is a brief, confidential write up of the business providing only basic information without identifying the name of the business or giving enough information for the public to identify the business for sale. Buyers interested in more information about the business for sale will be profiled and required to sign an NDA, that protects the Seller's confidential business information and articulates that the business sale is to be kept confidential. After an NDA is signed, a Confidential Business Overview (CBO), which is a more detailed document about your business containing industry terminology will be provided to the Buyer.
Step 7: Buyer Search and Screening
In this step, a comprehensive Buyer search and screening is performed to ensure that only valid offers from qualified prospective buyers are presented.
Step 8: Offers and Negotiations
Interested Buyers will send in a Letter of Intent (LOI) or an Engagement Letter. The LOI is the Buyer's written proposal and it outlines a proposed price and terms. The purpose of this document is to lay out the fundamental terms and officially declare that the negotiations can begin. The LOI is non-binding, which means it does not actually legally commit the buyer to follow through with the terms. The Business Broker will facilitate negotiations between the Buyer and Seller and guide the process as the LOI/Engagement Letter is accepted by both parties.
Step 9: Due Diligence and Contingencies
At this stage, there are several key conditions that will be addressed, including but not limited to, financial/legal due diligence performed by the Buyer and his or her accountant and attorney. Due Diligence is the process when the Buyer has the opportunity to examine all financial records and documents. If there is a lease involved, the buyer and his or her council will verify details including the measurements, insurance, market and lease agreement. Next, we move onto the lease agreement, franchisor approval (when applicable) and lawyer review/definitive purchase agreement where the lawyers for both the Buyer and Seller agree on final terms of the sale and closing.
Step 10: Closing
Closing is the most exciting and rewarding part of the entire process. This marks the completion of the sale process. Over the years, BizON and its partners have helped thousands of clients sell their business for top dollar.