Business Selling Guide (Detail)

Business selling process can be very easy with this useful guide wich will guide you through the business selling process. You can find out what to prepare and what to expect. The following information is basic steps of business selling process for business for sale for seller. BusiMarket.com does not guarantee or indorse the accuracy of information.

1. Determining the fair market value of the business

The business value really depends on the type, the age, and the location of the business. For more accurate information, We highly recommends discussing values and amounts with your business broker, attorney, or loan officer. If you already know what your asking price going to be, you can move on to next step.

2. Preparing all books and records for prospective buyers

Things to include in your business books / records:

last 3 years of busines income tax return

up-to-date Profit & Loss Statement / Balance Sheet

a copy of the Original Lease & Sublease Agreement

an up-to-date equipment list.

3. Putting your business on the market

. The following are options for putting your business on the market:

Input your business on Business Multiple Listing Service Sites like BusiMarket.com - Business For Sale or Companies like us

Advertise in a local newspaper

Hire a real estate broker or agent.

4. Dealing with Potential Buyers

Evaluate the Buyer:

Is the buyer financially secure?

How much business experience does the buyer have?

Is the buyer serious about buying your business?

5. Recieving an offer

The buyer writes an written offer and presents it to the seller. If there is a real esate agent involved, then the agent will deliver the written offer to the seller.

6. Negociation - Price, Terms, and Condition

The seller and the buyer negociate the price, terms, and conditions.

7. Accepting an offer

At the end of the negociation process the buyer and seller must sign and date every page of the Purchase and Sale Agreement.

8. Provide all necessary books and records for the buyer

Usually within 1-2 business days after mutual agreement.

9. Work with the buyer to remove all contingencies of the contract.

10. Signing the closing statement (1-3 days before the closing date)

After the buyer removes all contingencies on the Purchase and Sale Agreement, both the buyer and the seller make an appointment with the Closing/Escrow agent to sign the closing statement - usually 1-3 days before the closing date.

The buyer should call the escrow agent and find out the total amount of money that needs to be prepared (usually casher's check or money order) for the remainder of the down payment.

On the signing day, the buyer pays the money to the escrow agent and sign the closing statement

The escrow agent collects the money from the buyer, and the bank that the buyer financed, and pays the toal amount to the seller (down payment + loan amount - closing cost).

11. The Night Before the Closing Date

Both the buyer and seller meet at the business site after the business hour and

Review the Equipment List that is provided at the time of the acceptance of the Purchase and Sale Agreement

Get paid for Inventories and Supplies - write down all the items on a piece of paper with the wholesale price of each items. The buyer and seller sign on the grand total and the seller receives the total amount from the buyer.

Seller gives the business key to the buyer.

12. The closing date

Congratulations, You've Sold Your Business!!!

Business Buying Guide - Detail

First, You have to determining your investment. Usually minimum down payment made by the buyer is 30% of the purchase price. For example, if the business purchase price is $100,000 and loan amount is $70,000 (70%), then the buyer's down payment needs to be $30,000 (30%). Other possible expenses are inventories, supplies, escrow fee, license and permit fees, franchise transfer fee (if applies), etc.

And then you have to set criteria of desired business. Which includes location of business, type of business, price range of business, desired income of business.

After you decide your investment amount and criteria of business, you will need to find a right business that fit your needs. You can search business through online business listing service site like www.BusiMarket.com Business For Sale, local newspapers, or through local business brokers or real estate agents.

If you find a business that you want to purchase, you will need to evaluate the business through current owner's income information and your projected income for short term and long term.

And then you need to make decision to purchase business or not. If the business is right for you, you need to write a very descriptive and detailed contract (Purchase and Sale Agreement).

When you are writing an offer, you have to make sure the contract includes the followings: Your offering price, Initial deposit amount, financing terms, closing date. Other terms and conditions that can be added to the contract is buyer's loan approval, lease and lease approval from landlord, buyer to obtain all necessary licenses and permits, franchisor's approval of ownership transfer, the buyer's Satisfaction of books and records, closing cost allocation, buyer training session, business equipment and fixtures in good working condition, inventories and supplies amount, seller's agreement not to compete, etc.

After you finish writing an offer, you need to present your offer to seller. Negotiate the price, terms, and conditions and settle with final price and terms and condition.

Now you will need to allocate the purchase price of business that you are buying. After you done purchase price allocation, you will need to apply for loan, license and permits.

and then you will need to obtain a lease or sublease. You will need to make sure you obtain the lease or get an approval of lease assignment before close of escrow no matter what happened.

And then on or the day before the closing date, you will need to review the equipment list that is provided at the time of the acceptance of the Purchase and Sale agreement and buy inventories and supplies. And then you can do the closing on the closing date.