What a Buyer Should Know About Closing

Confidentiality is Crucial

If the seller’s employees, vendors, bankers, and customers are aware that the business is for sale, business operations are likely to be adversely affected by the uncertainty of a potential change in ownership. You may be subject to recourse in the event of your disclosing confidential information.

Buy a Business You Can See Yourself Owning and Managing

• You will look forward to going to work everyday
• You don’t have to understand the business 100% the day you buy it: the seller and related resources will provide a training and transition period. General knowledge and good business skills are what’s important.

A Typical Transaction is an Asset Sale, not a Stock Sale 

You will buy the business and its assets from the seller’s corporation. You will own the name, phone number, website and all assets. An asset sale protects you from liabilities associated with the seller’s corporation .

Buyers Normally Make a Contingent Offer on the Business

Use reasonable dates and timing: 3 business days for the seller to respond.

• 21 days is the average time for due diligence.
• Make an offer that works for you: Price, terms, contingencies, etc. The business will continue to be marketed for sale until all contingencies are removed.
• We can help you prepare the offer on our Purchase Agreement form.
• Broker will submit to Seller and the Earnest Money will be put into an escrow account once the Seller Accepts the offer. The Earnest Money is Fully Refundable during due diligence.

Typical Next Steps upon Acceptance of Offer from Seller

• Due diligence begins which includes review of the business financials and business information such as payroll records, sales tax records, tax returns, P&L’s, etc.
• Contingencies are signed off on/removed and Escrow is opened.
• A timeline for Closing is scheduled including Lease, Lease Assignment, Financing, etc.
• Business Escrow Company will prepare documents, complete lien searches and prepare closing statements for each party to review prior to closing. These documents are reviewed by the parties and their advisors.

Attend Closing

• Meet to sign documents
• Transfer of funds
• Begin training
• Finalize new licenses, transfer of utilities, etc.

With this quick checklist, your closing should be surprise free and smooth sailing.

Materials provided by Sunbelt Business Brokers.