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Steps Leading to the Purchase of a Business

Here are some procedures that are commonplace when going through the
process of acquiring a business property.  Whether a large company is being
acquired or a small business is being purchased, the bottom line dynamics are
remarkably similar.  The Buyer wants to thoroughly investigate what is being
considered and reach fair terms for the overall transaction.  The final objective
is that the Buyer gets what he or she pays for.

Initial Information.  The inquiring party is provided with some summary
information at the onset of the investigation. This can come in the form of a
telephone call, advertised information and Silverbridge will provide some in-depth
material that does not breech the Seller's confidentiality.

Non-Disclosure. The Non-Disclosure is an agreement signed by the Prospective
Buyer promising to maintain confidentiality of the information provided about the
business under discussion.

Review. Together the prospective Buyer and Silverbridge will discuss and review
the business property under investigation.  If there are questions that we cannot
answer, we will contact the Seller and get a response.

Buyer's Background Information.  The prospective Buyer provides
background information so that the Seller can have a realistic feeling for the
financial and business background of the Buyer.

Meeting.  A meeting at Silverbridge with the Seller gives the prospective Buyer
the opportunity to ask questions directly as well as present his or her own
qualifications to the Seller.  

Showing.  It is common for the Seller to take the prospective Buyer out in the
field in order to give a ‘hands-on’ feeling for the business.  It is important  to
experience enough of the company being considered before formulating an offer.

Offer To Purchase. An Offer to Purchase or Letter of Intent is drawn up and
presented to the Seller.  Silverbridge is available to offer assistance to the
prospective Buyer in the development of this document.  The offer is made by
the Buyer contingent upon the prospective Buyer validating the information he
or she is to be provided by the Seller.

  •  A good will check is required to demonstrate the Buyer’s seriousness
            to the Seller.  This check is held un-cashed by Silverbridge until that time the Buyer gives   
  authorization for the check to be  cashed.
  •  Offers are contingent upon the Buyer’s inspection of the books and records
            and other aspects of the business. The offer is not binding until all contingencies are

Mutual Acceptance. When Buyer and Seller agree to all terms and conditions of the sale, the offer
becomes a Purchase and Sale Agreement.

Inspection and Due Diligence.  The Buyer meets with the Seller to examine the financial records
and other elements of the business. Any questions are resolved at this time.

Contingency Removal.   If the contingencies which are part of the offer are removed the offer can
then become a binding agreement.  If not, then there are either more negotiations or the
transaction is called off and the goodwill check is returned.

Lease Assignment.  If there is a lease involved, Silverbridge will assist in the dealings with the
landlord to get an assignment of the current lease or the establishment of a new lease.

Open Escrow/Closing Attorney.  Silverbridge will provide all documents to the transferring agent
or attorney so that they can prepare the closing papers.

Escrow Procedures.  In most business sales escrow or an attorney performs both a lien search on
the business, in order to identify any secured creditors, and also a Notice to Creditor of Bulk Transfer.  
The escrow period is usually between 23 to 30 days.

Meeting For Transfer Arrangements.  During this period, often the Buyer and Seller will come
together in a meeting at Silverbridge to discuss the final elements of the sale.  This includes such
subjects as training and transfer of the company and accounts, if applicable.

Inventory.  Arrangements are made for the Buyer and the Seller to count the value of the
inventory (if required).

Buyer Takes Over the Business.  The Buyer and Seller work together closely during the transfer
period to insure a smooth transfer.  This will maximize the Buyer's success.  
Steps for Acquiring a Business Property