The Business Purchase Process
Get to know the steps to follow in the purchase of a business. Buying a business is a process that involves the involvement of various professionals. The following is a typical sequence of events for the purchase of a business:
- The Buyer meets with the Broker in order to help him define the type of business that best suits him according to his tastes and preferences.
- The Buyer signs a Confidentiality Agreement, in order to protect the interests of the Sellers.
- The Broker gives the Buyer confidential information of the business(s) that best suits him. If no listed businesses are a suitable match, the broker will conduct a detailed search for a new listings.
- The Buyer, with the Broker, tour the businesses they have expressed an interest in.
- The Buyer makes his selection and purchase decision.
- The Buyer with the guidance of the Broker, structures a Purchase Offer, in which the conditions and contingencies to the purchase of the business are established.
- The Buyer deposits with the Broker in an escrow account the good faith down payment for the purchase of the business (normally $5,000).
- The Broker presents the Purchase Offer to the Seller, accompanied by a deposit as a gesture of seriousness of the offer.
- In case the Seller agrees to the offer, he accepts and signs the Purchase Offer contract.
- Within 72 hours of the sellers acceptance of the offer, an additional downpayment equaling 10% of the purchase price is tendered.
- A closing date is established and the representatives for each party are working on the closing documents.
- On the closing day, inventory will be taken, documents are signed, and the business is turned over to the Buyer.