When the seller and the buyer have been talking for some time with regard to the purchase of a business, there comes a point that a deal needs to be made or the talks should come to an end.
This point is after all details of the business have been presented and the buyer has made a counter offer to the sellers asking price. This is followed with a counter offer from the seller or a refusal of the offer. The buyer then might offer to meet the price if the seller will give him terms on the payment of the money.
We are now in the stage of the deal known as the close. This is where the wheeling and dealing begins and the close is upon the buyer and the seller.
Let us back up now and see how we got to this point and how to make the deal fly.
Getting started
When getting started in the selling of a business, the first step is the exchange of all of the business financials as well as the opening asking price. This is the price that the seller knows he is not likely to get, but the price has to start at some level. Asking many questions and explaining in detail how the asking price was arrived at usually follows this opening gambit. Many details are then discussed and more questions are answered. The selling process is filled with these questions and answer sessions. The more accurate the seller is in their answers the better this part of the sale will go as it will build trust in the buyer. This is an important element for moving the sale to the close.
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First middle stage
At this point the buyer may bring in their own evaluator to see if your numbers for the asking price make sense. The may also ask around about the company from suppliers and even talk with some of the key employees. Some buyers may even discreetly talk with competitors if they will talk with a stranger about a company they are in competition with. One of the really good ways to get straight answers is to call clients and ask them if they would recommend the company. This could be an eye opener about a positive relationship or a series of negative answers. In any event, the clients will likely tell you what they like about the company and where they feel it could improve.
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At this point the information has been painting an accurate picture of the company and how it is accepted in the business world. The prospective buyer has a feel for how the business is likely to do when they are the owner.
The serious price negotiations start
With all of this data collected and maybe a price from their own certified business broker, the buyer will make a detailed counter offer to the seller. The buyer will also find out at this point if terms are available or will the seller only accept a cash deal. It is also time to find out if the seller keeps the same price if the business is bought on terms or is it going to be raised. These nitty-gritty details are one step closer to making an offer that will set the two prices the seller and the buyer must work from.
Closing the details and coming up with agreement
All of the talking between the buyer and the seller and their agents has brought the parties to where a deal can be put into writing. This agreement will cover the negotiated price, how it will be paid, any inspections that need to be passed and the date for the actual transfer.
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This is a place where having experienced help in a business broker will be very helpful. They are used to writing up final agreements that will pass muster. Their experience will come into play here, as they understand that the agreement is the written document, which lays out what the parties have decided they can live with. This agreement will detail every thing that both parties have come to terms with including when each step of the purchase will be completed by and any contingencies that need to be met.
The secret at this point in the sale is to not let any thing delay the deal. The buyer is ready to buy and the terms have been settled. If a question comes up at this point in time, move heaven and earth to get it answered. Do not let it go unanswered for more than twelve hours or less. Delays can do nothing to help you and may kill the deal. Buyerâ ™s remorse can set in at any time. A delay can open this door to losing the sale.
Make sure the legal details are covered
It would be a good idea to let an attorney look at the agreement to make sure that the terms are enforceable and legal. Maybe let them redraft the final sales agreement so it conforms to any state or federal laws. This may seem to be overkill, but a legal document is protection for both parties to the sale. The worst thing that could happen is after the sale a suit is brought and the document is found to be illegal and unenforceable. This makes good business sense and most people on a purchase of this magnitude will want the paperwork to be absolutely correct. The business broker may have a legal department that can do the drafting of the document as part of their representative service. The bottom line is make sure the agreement as understood is what is put down to paper.
Conclusions
From beginning to end the sale of a business is more difficult than most any sale the two parties are subjected too. The business sale is thorny as it has so many shades of gray in its makeup. A business broker is usually brought in to help with many factors including setting a price and bringing in potential buyers. They can help in many other ways be giving you a list of all the information you are going to need to supply so the sale can come to pass. There are many dots to make and tees to cross, in order to be able to have intelligent conversations with potential buyers. Explanations of critical data must sound logical and have a creditable foundation. All of this will be revisited during the closing stages of the deal, but it also will be looked at during other steps of the sales process.
A good certified business broker could make all of this flow much better than most sellers or buyers. They are brought in for their knowledge and experience in making deals come to fruition. You would be wise as a seller to find a recommended business broker as the very first step in selling your business.
Respect for all parties should be in place at all times even when the talks get a little tense and there are possible misgivings about information being supplied. Cool heads make deals and hot heads lose them.
 Nobody understands...any help please?
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Steps to Follow When Closing the Sale