Sunbelt Is Knowledge Experience | Business Sales Process | Sell A Business | Information
- Initial seller meetings are conducted by the Sunbelt broker (a professionally trained business broker/intermediary holding a Real Estate license), and the seller is educated on the process of selling a business.
- A Representation Agreement is filled out by the Sunbelt broker in coordination with, and signed by, the seller. Immediately after signing the Representation Agreement, the Seller provides the Broker the following:
- Complete lists of all equipment and other assets to be included or excluded in the sale.
- Profit and loss statements, balance sheets and tax returns of the business covering the last three years or more.
- The most recent interim profit and loss statement and balance sheet.
- Real and personal property leases.
- Copies of all patents, licenses, loan documents, contracts or agreements.
- All agreements relating to employee benefits.
- Any environmental reports.
- Copies of all other documents needed to present a fair and accurate description of the business to prospective buyers.
- During the representation period, the Seller must update each document when any material change has occurred. Seller consents to Sunbelt publishing, advertising or distributing information about the business in a discreet and confidential way to prospective purchasers as well as to contacting landlords and any others regarding any of the information about the business.
- Sunbelt writes a narrative on the business. The Representation Agreement is entered into the Sunbelt proprietary database, and a Business Profile is created. The Business is introduced to all of our other brokers during weekly office meetings.
- All other brokers match the Seller’s Business Data (SBD) against Buyers in their respective queues (Buyers, who have previously been interviewed, signed a Confidentiality Agreement and filled out a detailed Buyer’s Profile). Sunbelt plans an advertising strategy and the SBD is added to web sites in such a manner so the general public cannot identify the business.
- Buyers in queue and buyers who have responded from the advertisements will have their backgrounds and finances evaluated to determine if they are qualified buyers. If qualified buyers are interested in the business for sale, they will be shown a Business Profile. If further interest is shown, the Seller’s broker will arrange a meeting with the Seller.
- If a Buyer wants to make an offer at a fair price, the Buyer’s broker will write the offer and secure a deposit.
- The Seller’s broker will present all offers to the Seller.
- Seller and Seller’s broker will review each offer and decided whether to accept it or counter the offer. If Seller wants to counter, s/he can:
- Mark up the original offer, initial the changes and sign the offer.
- Re-write the offer.
- Once an offer is accepted, due diligence begins:
- All contingencies of the offer must then be addressed. If the due diligence proves the business to be as represented and all other conditions are met, the Buyer signs the contingencies to show they have been satisfied.
- If the due diligence does not prove the business to be as represented or any of the other conditions, such as securing third party financing cannot be met, then either the offer for the business for sale can be renegotiated or the offer will be canceled and the Buyer’s deposit check will be returned.
- Seller’s broker secures, answers and/or provides the following to ensure a timely close:
- Copy of the Representation Agreement
- Copy of the Purchase Agreement and Counteroffers
- Copy of signed Contingencies Removals
- Seller(s) name, address (other than business address), Social Security number, sales tax number, and federal tax identification number if a corporation.
- Buyer(s) name, address (other than Business address), Social Security Number, and federal tax identification number if a corporation.
- Secures the deposit check from Buyer.
- Secures leases – amount of monthly rental, security deposit, assignment, new lease, etc./Estimates closing date, date of possession by Buyer and pro-ration date.
- Investigates insurance. Will Buyer assume Seller’s or acquire new insurance?/Taxes – Requests the Seller’s property tax bill for pro-ration.
- Investigates required licenses. Are they transferable?
- If Buyer and/or Seller are a corporation – need names of the officer(s) authorized to sign a Corporate Resolution authorizing the sale.
- How will purchase be allocated?
- Good will
- Fixtures and equipment (FF&E)
- Covenant not to compete
- Licenses where applicable
- The closing attorney will prepare a draft of the necessary closing documents including:
– Closing Statement
– Purchase Agreement.
– Bill of Sale
– Buyer and Seller resolutions
– Non Compete, Non-Solicitation Agreement
– Any other documents such as, but not limited to, a Seller Promissory Note, if applicable.
- The above documents will be reviewed by the Buyer and Seller and their advisers, and will submit requested changes for consideration if necessary.
- Once the documents are agreed to, a definite date and time will be set for Closing.
- If applicable, the Sunbelt broker will coordinate a time acceptable to the Seller and Buyer to do an inventory count prior to Closing.
- The Seller and Buyer will be given instructions by the closing attorney as to what they will be expected to bring to Closing.
- Any amounts required by existing lien-holders must be satisfied prior to or at closing from the proceeds of the sale of the business.
- Any prorating such as rent, utilities etc., where necessary, will be prepared by the closing attorney and shown on the Closing Statement.
- When third party financing is involved, such as an SBA loan, sometimes a simultaneous Closing of the loan will take place by the attorney doing the business closing or by a second attorney representing the lender.
- When all documents have been signed and funds are in place, a full set of Closing Documents will be distributed to the parties and funds will be dispersed.