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Fundamentals_of_Selling_A_Business_ _Negotiating_and_Closing_the_Deal
| Fundamentals of Selling A Business - Negotiating and Closing the Deal
Fundamentals of Selling A Business - Negotiating and Closing the
Deal
Prior to negotiating the deal, you must establish clear and
achievable goals. Ten practical tips for successful negotiations
are as follows:
Focus on goals. Do not expect to win every battle. Understand
the other party's wants and needs. Do not get emotional. Be
flexible. Listen to the other party. Never be afraid to walk
away from a deal. Never threaten to walk from a deal unless you
mean it. Deal honestly and openly. Do not over negotiate. Letter
of Intent
Once both parties agree on the major terms and the price for the
business, they customarily enter into a formal agreement known
as the Letter of Intent. This document outlines the general
business terms between the buyer and the seller. These terms
should include the names of the parties, the business for sale,
the agreed purchase price, and the terms and structure of the
agreement. This is not a binding contract, but it is used to
provide information on mutually agreed upon terms that are to be
incorporated into the formal, legally binding contracts. At this
stage, a deposit is requested from the buyer, which would be
held in trust.
Due Diligence
In this last stage, the buyers would have the opportunity to
verify the information provided to them by the seller. Buyers
focus on areas such as:
Corporate organization and ownership Products and inventory
Customers and suppliers Management and employees Sales and
marketing Facilities and equipment Reporting and control systems
Financial results and balance sheet It is likely that the
buyer's accountant is involved in the due diligence process to
perform a financial audit and verify all past financial records.
If the business is incorporated, the buyer's attorney may
thoroughly review your corporate documents and legal standing.
Purchase Agreement
The purchase agreement details all the legal and financial
aspects of the deal as well as the business terms and structure
of the deal that were outlined earlier in the Letter of Intent.
This contract is legally binding.
© 2002-03. GlobalBX. http://www.globalbx.com. All rights
reserved. Buy a Business or Sell a Business on GlobalBX.
GlobalBX is a free business for sale listing exchange that
provides a confidential forum to facilitate the buying and
selling of businesses with thousands of businesses and
franchises for sale as well as comprehensive business
information for business buyers and business sellers. Lists
businesses for sale, business brokers, and franchise
opportunities.
About the author:
Jim Brown is Director of Marketing at GlobalBX,
http://www.globalbx.com. Buy a Business or Sell a Business on
GlobalBX, a free business for sale listing exchange that
provides a confidential forum to facilitate the buying and
selling of businesses with thousands of businesses and
franchises for sale as well as comprehensive business
information for business buyers and business sellers. Lists
businesses for sale, business brokers, and franchise
opportunities.
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