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What is the process of buying and selling a business? A run through of the process - (2023) )

02 Feb 2023

Guides & Helpful Tips

Company Becho

What to expect during the process of buying or selling a business, is something we get asked all of the time as business brokers. If someone has never bought or sold a business before it can be a very daunting task to deal with. At Signature Acquisitions, we are here to help you through the process. The purpose of this article is to provide you with some helpful tips and explain what to expect during the process. That’s not to say nothing will go slightly wrong or different to this, but in general this is how things work when it comes to buying and selling a business.

Business listed for sale

If you have read our last article you will have already done all your homework to make the sale of your business go as smooth as possible once you’ve made the decision to sell. But what to expect during the process for buying or selling a business is the next step. Once all of those tasks are completed your business will be listed for sale and once this has been done interested parties can enquire and at this time, you can decide whether or not you’d like to engage with them and send the information across once an NDA has been signed. Once they have the opportunity to review and consider all of this and had their accountant look over the information as well, they may wish to meet face-to-face, which we will happily facilitate to ask further questions, and hopefully make you an offer.

Letter of intent

Once an offer has been made and you have accepted, our recommendation to both parties is that a letter of intent is drawn up from the buyer and is sent over to the sellers. This is not legally binding but is incredibly helpful so both sides have an idea of what is being agreed to. It is also a good show of how serious the buyers are. The process of buying and selling a business can be a lengthy one so having a letter of intent can be another way in which to keep things moving along. This document will set forward a couple of things, but not be limited to:

  • The agreed sale price. Having already had discussions regarding price this is ideally the place to finalise everything before due diligence is carried out and where the price may change depending on the findings. But otherwise this is the agreed sale price the buyer is willing to pay for the business as long as nothing changes.
  • How will the buyer be purchasing the businesses? Is this full asking all at once? Executed through payments over an agreed period or time? Is there a loan required in order to secure the purchase or is it full or part cash buy? This needs to be set out at the beginning.
  • Time frame. When ideally does the buyer want to have the deal finalised by.
  • Any hand over period. The buyer will set forward how long they would like to have the current owner working in an advisory/consultative position for. This should have already been discussed to some extent beforehand as the seller should have an idea before putting the business up for sale what they wish to do and make that apparent.
  • What’s included in the sale? Is this a full buy out? Purchase of shares? Is any debt being paid off and you receive a clean slate with the business or are you purchasing it with the debt still in place? What assets are being sold with the business? Be clear in this document what you are agreeing to purchase.
  • Will you be asking the seller to sign a non-compete? This is a standard practice to stop the old owner from setting up a new business which is then in direct competition with the business you have just purchased from them. Be clear on this and how long this period of non-compete will be in place for.
  • Will you be having a period of exclusivity where the seller does not entertain any other offers? If yes, please confirm the period and terms applicable.

These are all the things you need to be thinking about and putting into a letter of intent, having your lawyer/advocate help to write this out will make the whole process a lot easier.


Once a letter of intent has been sent, signed and returned a deposit can be agreed and transferred across to your bank. This depending on what the buyer and seller have agreed can halt any further discussions between other parties while the due diligence is being performed.

Due Diligence

This step is most definitely the lengthiest of the sale process but one of the most important so don’t be worried either as a buyer or seller if this stage takes some time. Of course, saying how long this takes is like saying how long is a piece of string! It very much varies dependant on the company but its always an incredibly important step to do properly.

In this stage expect a few things to be asked of you as the seller:

  • Details on the people that work for and with the company, outside professionals and third parties working for the company.
  • Interviews with key members of staff in the company.
  • Strategic plans, articles of incorporation, memorandum of articles, bylaws, ownership information, organisational chart and marketing and sales strategies
  • Financial statements, tax returns and VAT returns (if applicable) for the past three years
  • Breakdown of everything your company has done, is doing and will be doing in the future. This includes the like of sales, expenses, gross margins, accounts receivable and payable, product lines to name a few.
  • A description of any issues affecting the company.
  • Inspection of buildings and equipment.
  • Projections for financials and budgets.


Its important that you are willing and able to allow access to all of this information and why it’s vitally important to have everything organised before you decide to put your business up for sale or it will only prolong the due diligence period.


Final SPA Sale & Purchase Agreement

The letter of intent that had been agreed earlier is a good base to start from when going over what you want in a sale agreement however this part should be fully discussed with your lawyer/advocate to agree on. You want the sale agreement to be fully airtight. Don’t leave anything to chance no matter how small it may seem to you. This is why it’s so important to have a good lawyer/advocate already sorted out before.



In the Final agreement you will have decided a time frame for when the remainder of the payment will be made and when the hand over process will begin. The payment may be done over a few payments or all at once depending on what you have agreed.


Dependent upon the agreement that has been set out, the finish line or end game may be more spread out if the seller is staying on for a handover period and/or the payment is being spread out. But as the seller you now have handed your business over and as the buyer now have your new business to run.

Disclaimer – all business sales are different this article looks over the main ways in which a business sale occurs but this does not always occur. You should always seek out and use a lawyer when looking to sell your business.