Business Selling Process

Purchaser Profile: RMD completes a "Purchaser's Profile" of the potential buyer,  including a resume, financial statements, and available capital to investment. The more we know about the potential buyer, the more likely it is we can find the right buyer.

Confidentiality Agreement: Each potential buyer sign a CA thereby promising to maintain confidentiality for all of the information provided, discussed or presented. 

Meeting with potential Buyers: A meeting between you, each potential buyer and RMD intermediary may take place if you are interested in obtaining more information regarding the potential buyer, and the buyer has executed a Confidentiality Agreement. This gives you the chance to ask questions you may have about how the potential buyer might manage the business and allow the potential buyer to feel comfortable with who you are.

Letter-of-Intent: The purpose of the letter-of-intent (LOI) to start the sale you business at a price and terms consistent with the marketplace.  Most business sell transactions also requires; an asset purchase agreement,  bill-of-sale, and several additional legal documents; which must be reviewed by your attorney and financial advisors. Selling your business is rewarding, but it can be a major undertaking and it requires your complete commitment to be successful.

Potential Buyer, RMD Financial

and Seller

Counter Offer: With the assistance of  RMD, the next step is to review the  Letter of Intent and structure a "counter offer."  After the Buyer and Seller agree upon a Letter of Intent; which requires an earnest money check along with contingencies that are to be satisfied during Due Diligence; the Buyer starts the business valuation process.   The Buyer's financial advisors and attorney will complete a Due Diligence on you and your business which will include a detailed review of your corporate financials, tax returns, legal structure, and all other relevant documents.

Acceptance or Counter Offer: The Buyer will either accept your Counter Offer 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 (LOI), and amendments (if any), you have mutual acceptance and it then becomes a Contingent Purchase Agreement.

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.  

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

Business License, Permits, etc.: During the Due Diligence and Inspection period the buyer, with the aid of their advisors, will verify information concerning your 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).

Lease Assignment: The your landlord may require the assignment of the existing lease or an entirely new lease. This is another critical step and one of the potential buyer's remaining contingencies. It is important to provide the landlord with a complete personal financial statement, resume, and lease application promptly to ensure the new lease or assignment is complete in time for the closing. 

Inventory: Arrangements are made for you and the buyer to count and price the inventory if it applies to the business you are selling. If it is a large or complex inventory it may be necessary to outsource this function to an inventory service.

Contingency Removal: Once the Buyer and Seller have remove all contingencies as each is resolved or met in the in the LOI and Asset Purchase Agreement, as a result of a completed Due Diligence and Inspection process the transaction will move to the Closing stage. 

Asset or Stock Purchase Agreement: The Asset or Stock Purchase Agreement is the "final legal document" which outlines the details of the sales transaction.  Both Buyer and Seller must executed the document (s); which super seeds the LOI and binds the parties to the transaction.  

Non-Competition Agreement:  The non-compete clause, or covenant not to compete, is a term used in contract law under which one party (usually a Seller) agrees not to pursue clients or trade in competition against another party (Buyer). 

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 via the final Asset Purchase Agreement or other documents. 

Escrow: RMD 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.

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