The 20 Step Buying Process, by Rick Krebs
1. Commitment Your commitment to purchase a business at price and terms consistent with the marketplace.
2. Disclosure You sign an agreement promising to maintain confidentiality for all the information provided to you on the business we discuss.
3. Background Information You provide us with information about yourself, such as a resume and a financial statement. The more we know about you, the more likely we can find a business you will like and the possibility for better terms greatly increases by providing the same information to Seller.
4. Review You and your Business Sales Group associate discuss and review various types of businesses and select some that appeal to you.
5. Showing Your Business Sales Group associate shows you the businesses you are interested in and issues the important factors of each.
6. Meeting Probably a meeting among you, the Seller and the Business Sales Group associate. This gives you a chance to ask detailed questions you may have about the business, and to better describe your qualifications to the Seller.
7. Offer to Purchase You write, with our assistance, an offer for the business you’ve chosen. Your offer will be a “contingent offer” meaning it is non-binding until the Seller has met all your conditions. Typically, you deposit earnest money at this time to demonstrate your seriousness to the Seller.
8. Present Offer We present your offer to the Seller.
9. Background We give to the Seller the Buyer’s background and financial information, Buyer’s experience and point of view in arriving at the offer price, terms and conditions. Favorable background information about the Buyer results in favorable consideration of the Buyer’s offer.
10. Explanation We carefully explain the terms and conditions of the offer to the Seller.
11. Acceptance The Seller accepts the offer as it is written or makes a counter offer.
12. Mutual Acceptance When Buyer and Seller agree to all terms and conditions of the sale, the offer becomes a Purchase and Sale Agreement.
13. Inspection Buyer Meets with Seller at Business Sales Group to examine the financial records of the business. Any questions are resolved here.
14. Contingency Removal Buyers remove all contingencies of the agreement.
15. Lease Assignment We work with the landlord to get an assignment of the current lease, or negotiate a new lease for the Buyer.
16. Open Escrow We provide all necessary documents to the transferring agent so they can prepare the closing papers.
17. Lien Search In most states the escrow attorney performs a lien search on the business to identify any secured creditors.
18. Inventory Arrangements are made for the Buyer and the Seller to count and price the inventory (if required).
19. Closing All parties meet to sign documents.
20. Transitional Training In order to insure a smooth and successful transition of ownership, it is customary that Seller continues to work with new Owner for a period of time following the closing date. This period varies depending upon the size and complexity of the business.
Rick Krebs is Co-owner of Business Sales Group of Utah. He specializes in selling and marketing good businesses. He holds a BS degree from Utah State University and a Master of Science Degree from Utah State University in Accounting. Visit http://www.UTAHBIZsales.com for more information about selling or buying a business.