Here’s the business selling process. You can find out what to prepare for and what to expect. The following information is basic steps of business selling for businesses for sale.
1. You must determine the fair market value of the business
The business value really depends on the type, the age, and the location of the business. For more accurate information, we highly recommend discussing values and amounts with your business broker, attorney, or loan officer.
2. Preparing all books and records for prospective buyers. No one will buy your business without due diligence.
Things to include in your business books / records:
last 3 years of your business income tax returns
up-to-date P& Loss Statement / Balance Sheet
a copy of the Original Lease & Sublease Agreement
an up-to-date equipment list.
3. Putting your business on the market
The following are options for putting your business on the market:
Input your business on Business Multiple Listing Service Sites like bizbuysell or Advertise in a local newspaper
You can also hire a broker
4. Dealing with Potential Buyers
Evaluate the Buyer:
Is the buyer financially secure?
How much business experience does the buyer have?
Is the buyer serious about buying your business?
5. Getting an offer
The buyer writes an written offer and presents it to the seller. If there is a broker involved, then the broker will deliver the written offer to the seller.
6. Negotiation — Price, Terms, and Condition
7. Accepting an offer
At the end of the negotiation process the buyer and seller must sign and date every page of the Purchase and Sale Agreement.
8. Provide all necessary books and records for the buyer
Usually within 1–2 business days after mutual agreement.
9. Work with the buyer to remove all contingencies of the contract.
10. Signing the closing statement (1–3 days before the closing date)
After the buyer removes all contingencies on the Purchase and Sale Agreement, both the buyer and the seller make an appointment with the Closing/Escrow agent to sign the closing statement. The buyer should call the escrow agent and find out the total amount of money that needs to be prepared (usually casher’s check or money order) for the remainder of the down payment.
On the signing day, the buyer pays the money to the escrow agent and sign the closing statement
The escrow agent collects the money from the buyer, and the bank that the buyer financed, and pays the toal amount to the seller (down payment + loan amount — closing cost).
11. The Night Before the Closing Date
Both the buyer and seller meet at the business site after the business hour and
Review the Equipment List that is provided at the time of the acceptance of the Purchase and Sale Agreement
Get paid for Inventories and Supplies — write down all the items on a piece of paper with the wholesale price of each items. The buyer and seller sign on the grand total and the seller receives the total amount from the buyer.
Seller gives the business key to the buyer.
12. The closing date
Congratulations, You’ve Sold Your Business!!!
Robert Smith Communications invests and buys companies in various industries doing $1 million to $10 million even $50 million+ in annual revenues. His seasoned team of legal and financial experts evaluate deals on a monthly basis.