Get ready to sell your business
Choosing and negotiating with a buyer for your business
Once you understand all the offers on the table you can narrow down the field and start negotiating with your short-listed potential buyers. Your adviser can lead the discussions and provide you with advice at every step. See hire professional services.
Once you have identified your preferred buyer it's essential to develop a relationship based on trust. Only discuss the deal with this candidate and don't try to negotiate better terms at this stage. It's important you understand any offer before accepting it, particularly any liabilities you will be taking on.
Create a written agreement
You then need to agree Heads of Terms with the buyer - sometimes known as a 'letter of intent' or 'Heads of Agreement'. This is a document setting out the key points of the deal. For example, what the buyer has agreed to buy (eg shares or assets), the payment structure (ie how and when they will pay), who will pay the costs, a list of assets, details of contracts and responsibilities to employees. See hire professional services.
It acts as a written record of the key features of your agreement which can be used to brief your solicitors or accountants. It may also provide an exclusivity period during which you are not allowed to negotiate with anyone else. Your professional advisers will help you draw this up.
Parts of the document may be legally binding - it might set out responsibility for the payment of legal fees if one party pulls out, for example. See understanding contracts when buying or selling a business.
You should also inform other interested parties when you have done this.