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Tasks to be completed |
Document Completed By |
1 |
Letter-of-Intent:
It starts with your letter-of-intent to purchase a
business at price and terms consistent with the marketplace. Buying a
business is rewarding, but it can be a major undertaking and it requires
your complete commitment to be successful. |
RMD Financial and Purchaser |
2 |
Confidentiality Agreement: You sign a CA thereby promising to maintain
confidentiality for all of the information provided to you on the
businesses we review, discuss or present. |
RMD Financial |
3 |
Purchaser Profile: By completing the Purchaser Profile, you are
providing us with information about yourself including a resume,
financial statements, and available capital to invest. The more we
know about you, the more likely it is we can find a business for which
you are qualified to acquire. The more information we provide to the
seller and financing sources, the stronger your negotiating position. |
Purchaser |
4 |
Opportunity Review:
Together we discuss and review various types of
industries and specific businesses, and select some that appeal to you
and which you are qualified to acquire. You will have the ability to
review confidential business profiles that, in part, summarize the
business, its financial information, facility and lease information. |
RMD Financial |
5 |
Business Presentation:
We present to you the businesses you are
interested in and discuss the opportunity surrounding each. These
initial presentations can vary from digital presentations in our
boardrooms, to actual on-site visits as the information process moves
forward. It is critical to remember when visiting any business, that the
fact the business is for sale is highly confidential and you must be
very careful to maintain this confidentiality during the visit. |
RMD Financial |
6 |
Meeting with the Seller: A meeting between you, the seller and your RMD
intermediary may take place if you are interested in obtaining more
information regarding the business, and seriously consider it as a
candidate for acquisition. This gives you the chance to ask questions
you may have about how the business operates and allow the seller to
feel comfortable in who is acquiring their business. |
N/A |
7 |
Offer to Purchase: With the assistance of your RMD intermediary, the
next step is to prepare an Offer to Purchase on our standard Purchase
Agreement for the business. A Letter of Intent may be used on larger
transactions. An Offer to Purchase or Letter of Intent will include an
earnest money check along with contingencies that are to be satisfied
during Due Diligence. |
RMD Financial and Purchaser |
8 |
Present Offer: Your RMD intermediary presents your offer to the seller
and takes the time necessary to explain the terms and conditions of your
offer to the seller and their decision makers. |
RMD Financial |
9 |
Background: With your approval, your RMD intermediary provides to the
seller your background, financial information, experience and point of
view in arriving at the offering price, and terms and conditions.
Favorable background information about you will result in favorable
consideration of your offer. |
RMD Financial and Purchaser |
10 |
Acceptance or Counter Offer:
The seller will either accept the Offer to
Purchase as it is written, or will present a Counter Offer. Once
Purchaser and seller agree to all the terms and conditions of the sale,
sign all counter offers, and amendments (if any), you have mutual
acceptance and it then becomes a Contingent Purchase Agreement. |
RMD Financial and Purchaser |
11 |
Due Diligence and Inspection:
At this stage the examination of financial
records and other operational information, inventory, management and
lease reviews take place. The due diligence and inspection stages are
critical for the Purchaser to confirm that what the seller has claimed
to be is truthful and accurate, and meets the conditions of your offer. |
RMD Financial or the Purchaser's financial advisor |
12 |
Contingency Removal: You remove all contingencies as each is resolved or
met in the Agreement. Once completed, it is a binding agreement. |
RMD Financial and the Purchaser's financial advisor |
13 |
Escrow: Your RMD intermediary will send the Purchase Agreement and other
documents to the escrow company or closing attorney who then drafts the
closing documents and deposits the earnest money deposit into their
trust account. Escrow is “open” as soon as both Purchaser and seller
have signed the documents. Depending on the state in which you live or
are acquiring the business, this process may be handled by parties other
than an escrow company. Your RMD intermediary can inform you in detail
what to expect in your local market. |
RMD Financial or the Purchaser's financial advisor or attorney |
14 |
Lien Search: In most states the attorney for the buyer, or the escrow
company, performs a lien search on the business to identify any secured
creditors. Liens to secured creditors will be removed prior to closing.
During the lien search there will also be an investigation with state
and federal tax agencies for tax clearances. |
The Purchaser's financial advisor or attorney |
15 |
Business License, Permits, etc.:
During the escrow period the buyer,
with the aid of their advisors, will be obtaining liability insurance
for the business, workman’s compensation insurance (if required), all
necessary business licenses and permits, EIN/TIN (Employer
Identification Number/Tax Identification Number), and form the
appropriate business entity (corporation, LLC, etc). |
The Purchaser's financial advisor or attorney |
16 |
Lease Assignment:
The seller’s landlord may require the assignment of
the existing lease or an entirely new lease. You will, with the seller
and landlord, obtain the necessary documentation for closing. This is
another critical step and one of your remaining contingencies. It is
important to provide the landlord with a complete personal financial
statement, resume, and lease application promptly to ensure your new
lease or assignment is complete in time for the closing. |
The Purchaser's financial advisor or attorney |
17 |
Note & Equipment
Lease: Your RMD intermediary will work with you, the
seller, and an escrow officer/closing attorney to have any agreed upon
notes and equipment leases assigned to you and your new corporate
entity. |
RMD Financial or the Purchaser's financial advisor |
18 |
Inventory: Arrangements are made for you and the seller to count and
price the inventory if it applies to the business you are acquiring. If
it is a large or complex inventory it may be necessary to outsource this
function to an inventory service. |
The Purchaser's financial advisor or attorney |
19 |
Closing: Signing of the final closing documents may be done at escrow,
in person, or in many cases, via courier, email, or fax. These
arrangements will be agreed upon by all parties prior closing. |
RMD Financial or the Purchaser's financial advisor or attorney |
20 |
Training: Agreed upon training with the seller commences after the
closing and during the change of possession. The terms and length of
seller involvement training is agreed to as part of the executed
Purchase Agreement. |
RMD Financial or the Purchaser's financial advisor or attorney |