Here are the phases of a business sale:
Curious/Information Gathering: Many business owners are not familiar with how to sell a company or have no idea where to start. Many resources are available to guide you in this phase of the process.
Actively Exploring: Business owners reach out to professionals for specific anwers to their questions. Business owners may interview others who have successfully sold their business and may also interview brokers to try to find a place to get started.
Valuation: The business owner begins the pre-planning process by ordering a business valuation and working with a broker to better understand their business.
Optimizing: The owner begins correcting business or real estate problems and troubleshooting areas of concern in the business. This process may take days, weeks, or years depending on what the goals are and what opportunities exist to improve the business.
Listing: When the market timing and personal timing are right, the business owner hires a broker to list the business for sale. This may take a week or two so that the marketing materials can be created or updated.
Buyer Screening: The broker makes contact with buyers and begins conversations to ensure they are qualified and interested in moving forward.
Buyer/Seller Meetings: These usually occur prior to offer submission or an LOI (Letter of Interest) and usually include a walk-through of the business.
LOI or Offer: These are negotiated and usually include input from an attorney and/or accountant.
Offer Acceptance: The seller selects one offer to move forward with and other offers may become back-up offers depending on seller strategy.
Due Diligence: The seller discloses additional information to the buyer, the lender, and the buyer’s team of professionals.
Closing Scheduled: When lenders are involved, this usually is a couple of weeks before the “clear to close” letter is issued.
Closing: This is the date the business transfers to the buyer.
Post-Closing: This may include a time of seller training and/or consulting which is agreed upon at the time an offer is accepted.