Virtual Expansion

Buying a business is a process and there are many steps in this process. There are also legal documents that must be reviewed and signed, as well as various business professionals that will be involved during various stages throughout the process.  The following outline will provide you with a basic understanding of how it all works – step by step

• 1. A Buyer contacts a Broker/Business Intermediary  in order to help him identify the type of business that best suits him according to his preferences. (Sometimes Buyers find listings on the Internet or in print advertising first before contacting a Broker.)
• 2. The Broker has the Buyer sign a Confidentiality Agreement in order to protect the interests of the business Sellers. The Broker then might have the Buyer fill out a Questionnaire to get some information about the Buyer’s experience and background.
• 3. The Broker can now give the Buyer confidential information about the businesses that fit his profile or that he has inquired about from Internet listings, etc.
• 4. If the Broker does not have any current business listings that are a good fit for the Buyer, the Broker can begin a search in the city or areas of interest to the Buyer.
• 5. After the Buyer has identified businesses they are interested in,  he needs to visit these establishments as a “mystery shopper” first.  If things go well after this initial visit – the Buyer can visit the company again to meet the owner, with the Broker present.
• 6. The Buyer makes his selection and purchase decision.
• 7. The Buyer with the guidance of the Broker, structures a Purchase Offer in writing, in which the conditions and contingencies to the purchase of the business are established.
• 8. The Broker presents the written Purchase Offer to the Seller, accompanied by an earnest money deposit as a gesture of seriousness of his offer.
• 9. If the Seller agrees to the offer, he accepts and signs the Purchase Offer contract.
• 10. The Buyer deposits with the Broker in an escrow account the down payment for the purchase of the business (normally 10% of the total sales price).
• 11. The Buyer then commences his investigation and verification of all the aspects of the business (financial, legal, fiscal, etc.). This stage is also known as the “Due Diligence” process. (normally 2 weeks is given to the Buyer for the due diligence phase)
• 12. The final draft of the Purchase Offer contract is then prepared with the assistance of an attorney.
• 13. A final count of the inventory is held between the Buyer and the Seller. (The final sales price might be adjusted depending upon the negotiations between the Buyer and the Seller.)
• 14. Employees of the business are then either be hired or  let go.
• 15. The Seller pays all the debts pending that are not taken over by Buyer.
• 16. The final Purchase Offer contract is signed before a Public Notary and the Buyer pays of the remainder of the down payment or sales price of the business.
• 17. Lastly, the Seller hands to the Buyer the keys to the business.