Buying a Business


PRELIMINARY REQUIREMENTS: Our responsibility to our clients is to introduce them to the best, suitable businesses for sale available in the marketplace. To expedite the process, we require the following documents on the buying entity. If there are multiple parties participating, these documents should be provided on each:

  • Confidentiality Agreement – We will require a confidentiality agreement to be executed before discussing the details of any business opportunity.
  • Personal Financial Statement or Net Worth Statement – Provide a summary of your assets, liabilities and net worth. The purpose of this is twofold: to determine the source of the funds to be used for the equity investment, and to determine that there is sufficient financial strength to complete the transaction. A Personal Financial Statement form is available, along with a Buyer Profile and Business Identification workbook.
  • Resume or Biographical Information – Provide a resume or biographical sketch describing your education and career experience. This will need to be provided to the Landlord and also the SBA if you are financing the business.

CONFIDENTIAL DISCUSSIONS: Please be assured that we will use extreme discretion in dealing with confidential information you share with us. Our ability to candidly and confidentially work with sensitive information is one of the components that constantly strengthens our reputation in the marketplace with both buyers and sellers.

DETERMINING YOUR OBJECTIVES: An introductory meeting will help us gain a better understanding of your background and acquisition goals, thus expediting the process of finding your target company.

THE ‘MATCHING’ PROCESS: Once your objectives have been determined, we will assist you in the ‘matching’ process. Your skills and interests are compatibly matched with our clients. If you agree with our assessment and continue to be interested in the identified company, the business for sale is discussed with you in greater detail. A confidential profile on the business for sale is provided which will include more extensive financial information and a broader history on the company.

PRELIMINARY ANALYSIS: As you continue to review the business information and do research on the industry, you will likely want to evaluate the financing alternatives available to you. Please remind your advisors of the confidential nature of your analysis. You may also have additional questions of us regarding the company. Many times we will know the answers or will contact the seller to get the information for you. Once you have completed this step, you are in a position to make a decision to either pursue the target company or look at other choices.

INITIAL MEETING: You have now decided to take your interest to the next level by meeting with the seller. Due to the confidential nature of the interchange, initial meetings are often held in our offices. The purpose is to allow both parties to gain an understanding of backgrounds, motivations, strengths and weaknesses, opportunities for growth, etc. In addition to you gaining information about the company for your further analysis, it is equally important that you convince the owner of your interest and ability to manage his company. A successful business owner will not sell his company to an unqualified buyer, regardless of the situation.

SITE VISIT: Working together to maintain confidentiality, you will be provided with the opportunity to visit the facility. This provides a good forum for the buyer and seller to develop a favorable rapport, and for additional discovery on the scope of the business for sale. Your representative will coordinate and attend the visit with you.

PURCHASE OFFER / NEGOTIATIONS: At this point, you have now satisfied yourself on the key transactional issues and are ready to purchase the business – your offer will generally be made in the form of a Letter of Intent. It will outline the purchase price, terms, conditions, and contingencies. Proper compliance with this step can save thousands of dollars in legal expenses. We are prepared to assist you with the negotiation process until both parties agree upon all items in the offer. A good faith earnest money deposit will be required and held in Escrow Account until closing, at which time it will be applied to the funds required at closing.

DUE DILIGENCE: An offer is usually contingent upon the buyer (or their representative) verifying the accuracy of the seller’s financial and operational representations. This detailed review is typically completed in thirty days or less of the signing of the purchase offer or Letter of Intent.

IDENTIFYING CRITICAL AND CONTINGENT ISSUES: We are prepared to work with you and the seller to address such issues as leases, regulations, licensing, key employees, minority shareholders, or other concerns that might apply to the specific situation. Failure to address these issues early on in the process can potentially lead to delays, wasted activity, and worst of all, become a ‘deal killer’.

CONTRACTS: After all major issues are resolved, a Contract can he drafted and negotiated. Financing can be completed. It is often discovered that an independent attorney and/or accountant can expedite the process of closing the transaction, and save significant expenses for both parties.

CLOSING: We will coordinate the closing, arrange for applicable fees to be paid and for the funds to be transferred. It is at this time you will have realized your ultimate goal – owning your target company!

TRANSITION PERIOD: There is normally a period of cooperation in which you and the seller work together closely to achieve a seamless transition into the new business. This includes transferring of key relationships and proprietary information needed to successfully operate the business.


An offer to Purchase specifies how the sale is to be structured:

  • Asset Sale: Involves the sale of specific assets including equipment, trade names, and inventory but generally does not include cash, accounts receivable, or accounts payable.
  • Stock Sale: Involves the transfer of stock in the company and effectively generally includes all assets and liabilities of the company.

An offer to Purchase specifies price, terms, and payment:

  • Total purchase price consideration
  • Cash due at closing
  • Assumption of debt (if any)
  • Seller financing terms – term, interest, security
  • Non-Compete compensation
  • Consulting income or earn outs

The Offer to Purchase is usually subject to certain contingencies that are satisfied prior to the final transfer:

  • Due Diligence (confidential information not disclosed by the Seller that the Buyer still needs to review)
  • Confirmation of financials, books and records
  • ***Financing arrangements
  • Lease assignment or negotiation of new lease
  • EPA Compliance
  • Licensing requirements
  • Franchise approval

Other issues addressed in the Offer to Purchase:

  • Buyer and Seller warranties
  • Training
  • Covenant Not to Compete
  • Allocation of purchase price
  • Desired closing date
  • Date by which Seller must respond
  • Earnest money

Once an Offer to Purchase is written, We are obligated to present it to the Seller. The Seller has three options:

  • Accept the offer as presented
  • Respond with a counter offer
  • Let the offer expire with no action taken (rejection)


  • Furnish company financial statements and tax returns for past three years.
  • A current statement, dated within the past ninety days is also necessary, with and aging of accounts receivables and payables and schedule of installment debt.
  • Furnish list of machinery and equipment, automotive equipment and furniture and fixtures presently owned by the company; cost of each item; was it purchased new or used.
  • If your business owns real estate, furnish legal description. If your business is buying real estate, furnish contract plus legal description.
  • If incorporated, furnish copy of certificate and articles or incorporation issued by the secretary of State.
  • Copy of lease.
  • History of business.
  • Projection of income and expenses for two years; monthly cash flow for 12 months on business less than one year old.
  • Resume on all principals, personal financial statements and tax returns on all principals for the past three years.
  • If you are buying a business or affecting a buy-out, furnish a copy of the buy/sell agreement.
  • If you are buying machinery or equipment with loan proceeds, furnish list of equipment to be purchased and cost of each item.
  • If there is construction involved, construction bids and a break down of costs, including sales contract.
  • Hazard insurance policy including fire and extended coverage.
  • Life insurance in the amount of the loan on the life of each principal.


  • Exposure to a larger group of business for sale listings.
  • Many businesses do not advertise that they are for sale.
  • We only work on an exclusive basis with our clients.
  • We’re hired to help screen for serious buyers.
  • We help manage the expectations of the Seller. Price, terms, components of the sales process- most have never sold a business before.
  • We can coach you through the acquisition process.
  • We know the Seller’s business and can better prepare you for what to expect in the meetings. Personalities, client base, employees, etc.
  • To handle negotiations.
  • To give ‘uncomfortable’ feedback.
  • To gracefully get you out if you discover you don’t want to proceed.
  • Through this, you remain the ‘good’ guy.