Questions that most buyers have:

We typically deal with first-time business buyers that are unsure of what they’re looking for. Whether they’re in the exploratory phase of the search or have a clear-cut idea of what industry they want to work in, it’s likely that they have many questions that need answering. The first step to any successful business purchase is to find out more about what type of business you’re looking for.

However, we also work with prospective buyers that work for private equity groups, larger corporations or are simply private investors who may have a better idea of what they’re looking for in a business. After an initial meeting or phone call, we will send you a confidential buyer profile that must be completed and returned to us. Once we receive this document, we can start pairing your needs with businesses that are currently offered for sale.

Some of the questions you can expect to answer in the document are:

• How many days do you plan to work per week?
• Do you prefer working alone, with a small team or a large group of employees?
• What is your current financial strength?
• Do you have any specific industry experience?
• Do you have prior management experience?

These questions are for the sake of pairing you with your ideal business and also understanding your financial limitations. This will help you save a lot of time and frustration, so it is vital that you are thorough and truthful while filling out the Buyer profile.

Confidential Summaries

Once we have a better understanding of both your needs and abilities, we can begin narrowing down the search for an appropriate business for you. At this point, we will be emailing you confidential summaries concerning opportunities that we have identified and that match more closely your expectations.

Narrowing the Search

Once you are happy with a few confidential summary sheets, we can start narrowing down the search even more in order to find the perfect business opportunity for you. This is the stage in which you will be exposed to more specific information about the businesses that you are interested in, including the identity of the seller.

Because of the sensitive information being exchanged during this second stage, you will be required to sign a non-disclosure and confidentiality agreement. Once these documents are returned to us and we have confirmed your financial capacity to purchase any given business, we will then give you full access to a confidential business review of the business you are interested in purchasing.

In addition to matching buyers with their ideal company, we also work directly with either the sellers or other Business brokers. This is to ensure that the sellers can continue operating their business while we handle the negotiations and pairing them with the appropriate prospective buyers. As such, we will work together with you to answer any concerns or questions you have regarding the business before we introduce you to the seller.

Contents of the Confidential Business Review (CBR of CIM)

The most important element will be the confidential business review that we help the seller create. The report is designed to give you all the information you need to help you make the right decision. A business review typically contains the following information:

A detailed description of the business

A summary of their financial data

Lease information and other additional business facts

The number of employees currently working for the business

A summary of contractual relations with suppliers and clients

Future expansion plans that may have been set in motion

This document, in addition to our assistance, will give you a thorough understanding of the business, its operations and the audience they appeal to. All of this information will greatly assist you in making your purchase decision.

Meeting the Seller and Touring the Business

If the business review has piqued your interest and you are considering making an offer, we believe that it is important for Buyers and Sellers to meet at least once before any offer is made. This meeting is generally conducted either via a zoom video conference or on site, after hours.

This is usually the turning point for many business transactions. You will be able to meet the owner face-to-face and discuss specifics, learn more about the business and also the person that currently owns it.

Making the Initial Offer

The next step will then be to make an offer which usually comes in the form of an Asset Purchase Agreement, also known as an APA.. This is regarded as the first steps to actually owning a business and will bring both you and the seller closer to a conclusion. The business you are interested in purchasing will be a privately held business. As such, you are generally obligated to make an offer before being given access to the more confidential internal financial records.

As a buyer it is important to understand that your offer will always be contingent upon the sellers being able to prove their representations during what is referred to as the Due Diligence period. Depending on the type and size of the business and your personal abilities to analyze financial data, performing due diligence may be costly and may take a while, but it can only be done after an agreement on price and terms has been reached. At that point you and/or your professional advisors will be able to review highly confidential information and verify that all representations upon which you based your offer were in fact correct.

Working With the SBA and Sellers

When purchasing a business, there’s a good chance that will you require some form of financing in order to help you make your purchase. We work closely with buyers to ensure that they can obtain the right financing options for the business they wish to purchase. This may mean that a seller’s note is required and will potentially requires a bank loan guaranteed by the Small Business Administration (SBA). Whatever your financing requirements, you can expect us to provide you with the guidance and assistance needed to help you make an informed decision.

Under contract

Once the offer has been accepted, you will be required to pay an Earnest Money deposit to the Closing Attorney and be asked to put together a due diligence list. This will be a request of items such as financial records, bank statements, updated equipment list, inventory, a copy of the lease and so on. You and your advisors will be given a set amount of time to complete your due diligence and remove any contingencies that were listed in the APA. This period is usually between 15 to 30 days. Once your due diligence has been completed, you will proceed with removing additional third-party contingencies such as securing a commitment from the Landlord to assign the lease and/or securing a loan to finance the acquisition. As for Home Inspections in Real Estate transactions, if the business does not pass your due diligence requirements, you are generally entitled to receiving your Earnest Money deposit back.

Immediately after the Due Diligence has been approved, you should start on completing a check list of items that must be ready at closing. Depending on the business you are acquiring, these may include items such as:

• Setting up your company
• Opening Bank Accounts and Merchant accounts
• Securing special licenses
• Hiring a CPA
• Insurance policies
• Setting up payroll
• Being ready with accounting software
• etc

We are available to assist you in establishing this checklist, if your CPA cannot.

When both parties are ready to close the deal, a third-party closing attorney will put together the applicable documents and begin closing the transaction. The closing attorney, in this case, does not guarantee that one party gets all the advantages while leaving the other with a poor deal. Their role is strictly to implement the terms of the APA that both parties have already negotiated. They will mediate any disagreements that could arise before the deal has closed. The costs of hiring a closing attorney is reasonable and usually split between both the buyer and the seller. We always recommend that your own attorney reviews these legal closing documents as well as the APA.

Post Closing

Now that your business negotiations have concluded and the business has successfully closed, we’ll ensure that we and the Seller help you post-closing so that a number of events occur, such as:

• Introduction to your team
• Post closing training by Sellers
• Transfer of phone numbers, domain names, social media accounts to your new entity
• Post closing reconciliation of Buyer and Seller’s books in the event that one party has to pay expenses or receives income on behalf of the other.
• etc

Congratulations, you can now be in control of your own future and forge a new career path. This may seem daunting, but we will remain available if and when you may need us.