|The Cypher Group can make the process of buying a business simple, but there are still a number of factors to be considered. The following paragraphs provide a straight-forward, step-by-step summary of how we can assist you in finding the right business to purchase.
- The first step is to contact The Cypher Group at 724-225-8100 or e-mail at firstname.lastname@example.org to schedule an appointment.
- You will be required to sign a Confidentiality or Non-Disclosure Agreement. This helps to ensure the confidentiality of buying and selling a business.
- You will be asked some basic questions about yourself so that we can develop an accurate profile of your goals and expectations; this will include an assessment of your ability to finance and operate the type of business you have in mind.
- We will then direct you to businesses that match your criteria, each presented with a Confidential Business Profile (‘CBP’) that contains key decision-making information including market and industry data operating performance and other financial information.
- After your assessment and decision to proceed, a meeting is arranged to view the business and to meet the Seller with your questions. Typically, this is a discrete visit, arranged after hours, to preserve confidentiality.
- If you are satisfied with the results of this meeting, and interest is still high, you are at a point where we can assist you in preparing an offer or requesting further information.At this time, any reasonable request for additional information will be honored, however, due to confidentiality issues, some information may not be released until after your offer has been presented and accepted.One needs to realize that an offer is just that, an offer, and is typically subject to many contingencies. A seller, therefore, may restrict some of the information they are willing to provide to you until such time as they determine the seriousness of your interest.
- Your offer, when prepared, will adhere to our standard format that provides for your protection throughout the offer process. Your broker will also know what is likely to be agreed upon by the Seller thereby avoiding much back and forth, however, you should expect some typical negotiations in the process.Your purchase offer will typically be a conditional offer or in the form of a letter of intent (‘LOI’). It will also contain specific requirements for the Seller as far as training and transition.A reasonable deposit based on the purchase price typically accompanies the offer. Additional funds are often deposited as requests are satisfied and/or contingencies are removed. The purchase offer typically contains other provisions such as a stated due diligence period, deadlines for obtaining financing and a specific closing date.The due diligence period allows you and your advisers to verify and review the information given to you including any information that may have been withheld prior to your offer.
- Similar to a real estate purchase, funds held on deposit will be made via certified check to an escrow account administered by an agreed upon third-party escrow agent or law firm. These funds will be applied toward the purchase price of the business.
- Upon removal of all contingencies, the offer becomes firm and binding.The details of your accepted offer or ‘LOI’ will be forwarded to the lawyers for both parties for drafting and review of the Definitive Purchase Agreement.The Definitive Purchase Agreement is the actual agreement of purchase and sale. It typically includes all of the conditions and clauses in the original offer or LOI, plus any additional clauses and conditions you and the seller agree upon.This agreement is typically drafted by the buyer’s lawyer.Buyer and seller are typically responsible for their own respective legal costs.
- We will work with lawyers and other professional advisers who may become involved to ensure that all details concerning various forms, applications, directions, assurances, releases, assignments, instruments, etc., are detailed to your satisfaction. It is important that you identify this to your advisers and lawyers so they know that your broker will be responsible for managing the transaction to a successful close.
- Once the Definitive Purchase Agreement has been accepted by both legal counsels and agreed to by you and the seller, all parties are ready for the closing. At this point, any other agreements, such as non-compete agreements, training and transition contracts, lease or sale of premises (if applicable), vendor notes, security agreements, etc., are also executed. Additionally, any funds required from the buyer to meet the agreed upon down payment are deposited into escrow and these funds are conveyed to the seller.
- Often, there will be an adjustment period that is specified in the Definitive Purchase Agreement where some of the funds will be held in escrow pending final invoices being settled and other similar adjustments.
- Congratulations! You are now the proud owner of your new business.