The Selling Process:

Confidentiality: Throughout the selling process, all information you provide is kept confidential. Only appropriate details will be released as necessary, and all parties receiving information will pledge to protect its confidentiality. Unless otherwise agreed upon, no one will be given your name or other identifying information without your specific consent.

Introduction: We must meet and learn about each other to decide if we should work together to sell your business. What are your goals? Why do you want to sell? Is now the right time? What are the strengths and weaknesses of the business? Who are the principals? Why use the Colorado Business Exchange?

Valuation: We help you complete a Confidential Valuation Profile and forward it to an independent appraisal company, who will render an opinion of Fair Market Value. Additionally, this process reveals the questions and concerns of prospective buyers. Taking time to address these concerns during the appraisal process helps us prepare appropriate responses to their inevitable questions. See also: BUSINESS APPRAISALS

Decision: Once the appraisal process is complete and we have the final report, you are ready to make a decision. What is best for you and your family… your value of owning and operating the business, or its Fair Market Value in cash? This may be one of the most important decisions of your life. Please, take your time and consider your options carefully. If you choose the cash, we need to decide on the terms of a listing agreement and an asking price. See also: SELLER HOME PAGE

Preparation: Colorado Business Exchange prepares an Offering Memorandum (OM) and a Confidential Business Review (CBR). The OM is public information designed to entice prospects to inquire about a business like yours. The OM provides basic financial information and a brief confidential description of the business. The CBR confidentially presents most of the information a prospect needs to make an offer, including an organization chart, key employee positions, customer demographics, product/service lines, list of furniture, fixtures and equipment, real estate or lease information, marketing information, photos if appropriate, etc. The CBR is distributed to qualified prospects only!

Marketing: We review buyer databases and contact appropriate prospects. Target buyer markets. Decide on appropriate media. Offer significant fees to outside brokerage firms for buyer referrals. Generate buyer interest by using the OM in mass media and internet advertising, obtaining broker referrals, and marketing directly to targeted individuals and groups.

Qualification: Colorado Business Exchange works with buyer prospects to understand their financial capability, cash needs, abilities and desires. If the prospect has genuine interest, the financial capability, and has agreed to the terms of our Confidentiality Agreement, they will receive a CBR. We discuss the CBR with the prospect, explore scenarios that show the prospect as successful in your company, help the prospect see the value of your company, and assess the prospect’s intention to make a reasonable offer.

Meeting: You meet qualified prospects only! Prospects will likely ask pointed and probing questions about your business, your motivations, your opinions, your expectations etc. You have the opportunity to inquire of the prospect as well, their experience, credibility, motivations, etc. An important purpose of the meeting is for you and the prospect to develop the rapport needed to achieve a successful transition.

Contracting: We help the prospect 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 BUYAND SELL REAL ESTATE (COMMERCIAL).

Negotiation: If buyer’s 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 negotiating the CONTRACT TO BUY AND SELL A BUSINESS, the buyer relied on your good faith statements regarding the business. In Due-diligence, they have the opportunity to verify the accuracy of those statements. The buyer 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 the buyer is not confident that the business is performing as represented in the Presentation and Meetings or if a contingency is not addressed to their satisfaction, they might not remove the contingencies voiding the contract. If the contingencies are addressed appropriately, they should remove the contingencies and proceed to closing. 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 will assist the buyer in choosing an appropriate lender. Once the buyer has chosen a lender, we work with the buyer 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. Buyer brings 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!