The Buying Process:

Brokerage Disclosure: The Colorado Real Estate Commission requires brokers to disclose their brokerage relationships as the first step in working with a potential buyer. Therefore, you must complete and return to us the two-page BROKERAGE DISCLOSURE TO BUYER before we can discuss any business listed for sale.

Confidentiality: If word that a business is for sale spreads through a community, that business will likely be damaged in several ways. Employees often start looking for another job for fear of the unknown. Customers might cancel contracts, or at least explore other options. Competitors may leverage “the selling” to steal work. Therefore, you must complete and return to us a CONFIDENTIALITY AGREEMENT before receiving any information about a business. Additionally, most sellers require us to conceal their name and other identifying information until they specifically authorize its release to a prospective buyer.

Qualification: Sellers set minimum requirements for prospective buyers such as financial, experience, education, licensing, etc. The Colorado Business Exchange must establish that you meet those requirements prior to discussing a business.

Profile: If we are going to help you buy a business, we need to know a little about you. What is your background? What are your strengths and weaknesses? What are your work habits? What types of ownership roles suit your personality? What types of businesses interest you & why? What are your personal income needs? What are your financial capabilities? Anything else? Help us help you find the right business.

Presentation: If you meet the seller’s minimum qualifications and your profile suggests you have the capacity for success in a particular business. We’ll provide you with further details about a company and its operations. We’ll reveal both positive and negative attributes of the company, its current trends and future potential. We’ll help you understand what your role will be as owner of the business and answer questions you may have. We’ll discuss the concept of Fair Market Value and show how it relates to your target company. If the businesses seems right for you and you are willing to negotiate a Fair Market Value for the company, we’ll arrange a meeting with the seller.

Meeting: This is where you will first learn the identity of the seller. We may tour the facility (after hours). You may ask pointed and probing questions about the business and the owner. After this meeting, you should be able to decide if the business is right for you. Additionally, you should be prepared to answer the owner’s questions. They might inquire of your background, motivations, and intentions, even your credit history. An important purpose of the meeting is for you and the seller to develop the rapport needed to achieve a successful transition.

Contracting: If the business seems right for you and you want to make an offer, we help you write a CONTRACT TO BUY AND SELL A BUSINESS. If accepted this becomes a binding contract between buyer and seller. Our attorney has prepared this contract form. Many of its provisions are lifted directly from the Colorado Real Estate Commission approved form: CBS 2-7-04, CONTRACT TO BUY AND SELL REAL ESTATE (COMMERCIAL).

Negotiation: If your initial offer is not acceptable, we act as a mediator to facilitate an acceptable agreement. To be successful, the transaction must work for both buyer and seller, so we assist each party in understanding the legitimate positions and concerns of the other. As transaction brokers, the Colorado Business Exchange does not advocate for either party. However, we have an obligation to the parties, as well as financial incentive, to help you reach an acceptable contract.

Due-diligence: When you negotiated the CONTRACT TO BUY AND SELL A BUSINESS, you relied on the seller’s good faith statements regarding the business. In Due-diligence, you have the opportunity to verify the accuracy of those statements. You may audit the business records such as cash register receipts, bank statements, ledgers, tax returns, payroll records, leases, equipment maintenance records, etc. Additionally, there will be several contingencies that must be removed or the Contract will be void. If you are confident that the business is performing as represented in the Presentation and Meetings and each contingency is addressed to your satisfaction, remove the contingencies and proceed to closing. If you are not sure, do not remove the contingencies and void the contract. The Colorado Business Exchange works with both buyer and seller to facilitate this process.

Financing: The Colorado Business Exchange maintains a relationship with several local and national lenders. We understand the difficulties in obtaining conventional or SBA loans for the purchase of a business. We can assist you in choosing an appropriate lender. Once you choose a lender, we work with you, the seller and lender to facilitate the flow of information keeping things on course to closing.

Documentation: Once all contingencies are removed, buyer and seller must authorize the engagement of a closing attorney. Colorado Business Exchange works with the closing attorney to prepare all the necessary searches, reports, escrows, and documents for closing. These will be distributed well in advance of closing for buyer and seller to review with their respective advisors and make comments. Documents will be amended as necessary and redistributed for final review.

Inventory: If necessary, a physical inventory is conducted as agreed by buyer and seller. The closing documents are amended to reflect the exact inventory amount being transferred.

Closing: Formal execution of all documents to complete the transaction. Title to the business changes hands. You bring certified funds to be deposited into the closing attorney’s trust account. The closing attorney distributes those funds as appropriate. Closing marks the end of the transfer and the beginning of the transition. Congratulations are in order!