The sale of a business can be likened to courtship and marriage – what you disclose and when is
an essential element of the process. Give away too much, too early, and the “ardour” may cool
off. Hold back too much, and the buyer may not be able to gain a full understanding of the
business, it value, or its potential.

At some point, you will need to reveal all. This is always uncomfortable for the seller, but at
some point, the buyer needs to finalize &due diligence

1. Buyer signs first confidentiality agreement to get basic information on the business –
name, address, business information package, including summary financials.

2. Buyer indicates interest to pursue further by providing a letter of intent or an offer to
purchase. This letter will be subject to certain conditions, typically financing and “due
diligence.” It will also typically re-confirm the original confidentiality agreement and/or
include clauses that protect the seller further.

3. At this point, to satisfy due diligence, the buyer will want to review financial statements,
tax returns, and other sensitive information. Both parties are starting to incur
accounting and legal costs. So it is important to have a basic understanding of the
general agreement as spelled out in the Letter of intent.

4. The issue of client lists always arises. Sellers probably don't want to reveal them at this
point, but, depending on the type of business, buyers may need to know this level of
detail. This is typically discussed as part of the LOI process.

5. Once all conditions have been satisfied, the Buyer can remove conditions and close the

Need more information? Call us at 204-478-7266, ext. 110. or click to download our free e-book on
selling a business.