Sellers > Tools > Process

Phases of Selling A Business

Selling a business is complex and time consuming. This process can be broken down into four main phases.

Phase I: Confidentiality Agreement
Signing this document gives the buyer access to sensitive information regarding your business. It also protects you by ensuring that confidential information shared during negotiations with the buyer will not be shared with anyone else.

Phase 2: Preliminary Negotiations/Letter of Intent
Both parties negotiate a letter of intent, which is non-binding and forms the basis for the definitive agreement. It outlines the deal structure, the purchase price and form, payment terms and closing contingencies.

Phase 3: Due Diligence
During due diligence - this vitally important phase – allows the buyer to examine the business background, finance, human resources, tax and legal matters of your business.

Phase 4: Negotiation/Definitive Acquisition Agreement
There are four main sections of the Definitive Acquisition Agreement: purchase price, representations, indemnification and covenants.