The Selling Process

No two business sales are the same, each will have different challenges. However a typical transaction will involve the following Selling Process:

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  1. The vendor decides to embark on an exit strategy through the sale of their business.
  2. The vendor puts together a business sale team, i.e. legal representative, accountant and business broker.
  3. The vendor selects a business broker appropriate to the nature of his business.
  4. The vendor arranges a meeting (Initial Appraisal) with the broker and decides whether
    1. To embark on a period of implementing improvements to the business performance and structure (Business Grooming), or
    2. To start the selling process straight away.
  5. Once the vendor and broker decide it is the right time to sell, a Letter of Engagement is signed in order to retain the broker to market the business.
  6. The Sale Preparation process starts and the vendor provides all necessary documentation (accounts, asset lists etc.). See Documentation and Information Required
  7. The broker prepares a Valuation report to identify the bottom-line deal value, possible deal structures and appropriate asking price / marketing strategy.
  8. The broker prepares the Marketing Brochure (Sales Memorandum and Full Information Package).
  9. The vendor signs his approval for both the Valuation Report and Marketing Brochure.
  10. The broker works with the vendor to make sure all supporting documentation is ready for buyer enquiries and the eventual due diligence process.
  11. The broker proceeds with Marketing the business.
  12. The broker manages all buyer responses and enquiries (see Buyer Management):
    1. Buyers are qualified for their suitability.
    2. Each buyer will sign and return a Non-Disclosure Agreement (NDA) / Confidentiality Undertaking before receiving any further information.
    3. The Sales Memorandum, (an overview of the business structure, products & services and financial performance), will be provided to the buyer.
    4. Any buyer questions are directed to the broker.
    5. The broker arranges a meeting between the vendor and the buyer, either at the business premises or at a discreet location.
    6. The Full Information Pack, (financial statements, asset lists etc.) will be provided to the buyer.
    7. Any further questions and meetings are managed by the broker.
  13. The buyer submits an offer to the broker.
  14. The broker reviews the offer with the vendor to decide the appropriate response.
  15. Further negotiation takes place as necessary, mediated by the broker, until an offer is accepted (see Negotiation & Mediation).
  16. A Heads of Terms Agreement is drafted by the buyer and/or vendors legal advisors and signed by both parties.
  17. The transaction process now begins, coordinated by the broker (see Trans