West USA Realty - Scottsdale, AZ

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The Business Sale Or Transfer Process For Sellers

Below is a rough outline of some of the general steps usually involved in the transfer process of a small business for sale.

1. Broker And Seller Meeting: A confidential (information only) meeting is held with prospective Seller to provide a preliminary business valuation, outline of the Broker services offered, answer questions, and provide information about the listing, marketing, and sales process. Please click here to view some frequently asked questions that many Sellers have.

2. Listing Agreement Signed: If the Seller decides to move forward, A confidential meeting is held to sign a exclusive listing agreement with Broker, and to collect listing information (click here to print list of information needed) so a in-depth confidential business profile (click here to view and print a profile outline) can be prepared for the Seller to review and approve.

3. Business Profile Approved: Seller reviews and approves confidential business profile. After approval,  the activation of the marketing process begins, including placing a confidential teaser advertisement on 4 busy National and Regional "business opportunities & businesses for sale" web sites.

4. Buyer Qualification & Non- Disclosure Agreement: Prospective Buyers who contact the listing Broker about the business are screened for financial capability, and are  required to sign a non-disclosure agreement (indicating they are financially qualified) before receiving any pertinent details. Click here to view copy of non-disclosure agreement.

5. Confidential Business Profile Released: Qualified & disclosed Buyers are forwarded a confidential link to access an in-depth on-line (hidden from public) profile about the business for sale. Click here to view a sample business profile.

6. Buyer & Seller Meeting: Qualified buyers that have high level of interest about the Seller's business are invited to request a confidential meeting with the Seller to view the operation and to ask questions about the business. Generally, these initial informational meetings will last approximately 1 or 2 hours.

7. Offer Presented By Buyer: Interested Buyers are encouraged to write and present an offer to listing Broker to forward to Seller for his or her review. The Seller may accept the offer as presented, or write a counter offer with the help of Business Broker.

8. Mutual Acceptance: Buyer and Seller agree to all the terms and conditions of purchase agreement. This includes any contingencies or conditions the Buyer may have attached to the agreement that must be removed or satisfied before closing date.

9. Open Escrow: Signed purchase agreement and a pre-negotiated earnest money deposit from Buyer is placed in a third party escrow account. Escrow agent is charged with receiving, depositing, and distributing funds for both parties, evidencing the terms and conditions to agreement, as well as preparing closing documents to close escrow. Escrow agent w ill also perform a lien and judgment search on Sellers business. Any liens or judgments that arise must be satisfied before closing. Closing costs are split between Buyer and Seller, and are for example approximately $1,000 for a $500,000 value sale.

10. Due Diligence Period: Buyer (and advisers) begins a detailed review of the business, including financial records, tax returns, equipment leases, lease assignments, etc. On average, a Buyer's due diligence period can last anywhere between 2 to 4 weeks. This time period is also used by the Buyer to remove or satisfy any and all contingencies that may have been attached to the agreement. Ideally, the contingencies will be removed and signed off on at least a week before the actual closing date.

11. Closing Day: All contingencies to the contract have been removed or satisfied. Buyer and Seller meet at Escrow office to sign and execute all closing documents. Seller receives closing funds. Buyer is the new owner of record

12. Transition & Training Period: Buyer begins a pre-negotiated period of training and transition with the former owner. On Average this transition period can last any where between 2 to 4 weeks, with longer periods often negotiated by both parties when more complicated business operations are transferred.

Please feel free to contact us directly at 602-292-0553 if you have any questions.