Preparing an offer

Preparing an offer

It takes a lot of time and effort to get your business ready for sale. You’ll need to get your business records together, determine the value of your business, and come up with a marketing plan to get the attention of prospective buyers. An offer to purchase your business could come in a variety of forms. However, no matter its form, all offers will include a few things, that is:


  • Price and terms of the offer
  • Conditions of/for closing, i.e. training or continued employment of key staff
  • Working capital, if any, to be included in the sale
  • A prospective closing date
  • What is included or excluded from the purchase
  • Details of the offer, i.e. what intellectual property is included in the deal


You’ll also be asked to respond to the offer in a specified period of time. You could accept the offer as is or negotiate the price along with other terms. Typically, an offer is non-binding, which gives each party, both the seller and the buyer, time to change their minds about the deal. Unfortunately, an offer only gets you half-way there. This is because many deals fall apart prior to closing for many reasons.


The Deposit


To show « good faith », most often the seller will put down an earnest deposit. The M&A advisor will hold this deposit in trust until the deal is closed or ended. Our team always makes it a practice to make the deposit refundable so that the purchaser feels more comfortable. We also protect the purchaser by including a clause that makes the offer conditional upon acceptance of final terms by both parties. This gives time for the M&A advisor to engage in further negotiations on your behalf before the closing.


The Importance of an M&A advisor.


Therefore, they are qualified to give you advice concerning the deal. Looking at the offer, you might feel overwhelmed. But don’t fret. Your M&A advisor will put everything in simple terms for you so that you can understand it. They will also work closely with your financial advisers and will help in negotiations with the buyer. Rely on your M&A advisor to get you the best possible deal and to make sure that you get to closing. Even when everything is done right, the deal might still fall through. For this reason, your M&A advisor will continue to market your business until the closing is complete.


Trust your Mergex team, your business sales professionals!