Guide: How a Business Sale Unfolds

Summary

Who it's for

Business owners thinking about selling who want to understand the process before they start.

The stages

Seven: free appraisal, proposal, preparation, buyer outreach, offer, exclusivity and completion.

Decision points

Five moments where you, or a buyer, decide whether the sale moves forward. Only the first two end the sale outright. The later ones send the business back to market.

Exclusivity

Once you accept an offer, one buyer has exclusivity, typically for one to three months, to finalise finance and due diligence.

Flow: How a business sale unfolds | Seven stages, five decision points, and what happens at each one | Seller education series

• 1 · Free appraisal
• Price agreed? yes | no → Sale does not proceed → Note: You can revisit a sale whenever you’re ready
• 2 · Advisor sends proposal
• Proposal accepted? yes | no → Sale does not proceed → Note: You can revisit a sale whenever you’re ready
• 3 · Preparation three pieces of work in parallel | Marketing plan: Who the buyer is; who to include or exclude | Data room: Due diligence material, held back until stage 6 | Sale documentation: Teaser, pitch deck or information memorandum
• 4 · Confidential buyer outreach Buyer vetted; confidentiality deed signed
• Sale documents shared Pitch deck or IM
• Buyer response? makes an offer | Not for them — withdraws → Advisor moves to the next buyer → stage 4 → Note: Common, and not a setback for the sale | Wants more information → Advisor answers questions → stage 5
• 5 · Non-binding offer or term sheet Price and main terms, not yet binding
• Your decision? accept | Decline → Back to other buyers → stage 4 → Note: You’re never obliged to accept an offer | Negotiate → A revised offer comes back → stage 5
• 6 · Exclusivity typically one to three months | Buyer finalises finance: Bank or investor funding confirmed | Final due diligence: Data room opened; everything verified
• Outcome of due diligence? | Deal falls over → Issues found; back to market → stage 4 → Note: Not the end of the sale
• Either Share sale contract signed | Business asset sale contract signed
• 7 · Completion Money, ownership and handover

The Seven Stages

1 · Free appraisal

Every sale starts with an appraisal of what the business is worth, so you and your advisor have a price to work from. If you can't agree on a price, the sale does not proceed.

2 · Advisor sends proposal

Once the price is agreed, your advisor sends a proposal setting out how the sale will be run. If the proposal isn't accepted, the sale does not proceed.

3 · Preparation

With the proposal accepted, three pieces of work run in parallel.

Marketing plan

Who the buyer is likely to be, and who to include or exclude from the process.

Data room

The due diligence material a buyer will need. It is held back until exclusivity, at stage 6.

Sale documentation

A teaser, pitch deck or information memorandum that introduces the business to buyers.

4 · Confidential buyer outreach

Your advisor approaches buyers confidentially. Each buyer is vetted and signs a confidentiality deed before receiving the pitch deck or information memorandum.

A buyer then responds in one of three ways. They withdraw, and your advisor moves to the next buyer. They ask for more information, which your advisor answers. Or they make an offer.

5 · Non-binding offer or term sheet

An interested buyer puts forward a non-binding offer or term sheet: the price and main terms, not yet binding. You can accept it, negotiate for a revised offer, or decline and go back to other buyers.

6 · Exclusivity

Accepting an offer gives that buyer exclusivity, typically for one to three months. Two things happen in this period.

Buyer finalises finance

Bank or investor funding is confirmed.

Final due diligence

The data room is opened and everything is verified. If issues are found, the deal can fall over and the business goes back to market.

7 · Completion

When due diligence is complete, the parties sign either a share sale contract or a business asset sale contract. Completion follows: payment, transfer of ownership and handover.

The Five Decision Points

At five points, someone decides whether the sale moves forward. A no at either of the first two ends the sale. A no at any of the later three sends the business back to market rather than ending the sale.

Price agreed?

Yes: your advisor sends a proposal. No: the sale does not proceed.

Proposal accepted?

Yes: preparation begins. No: the sale does not proceed.

Buyer response

The buyer makes an offer, asks for more information, or withdraws and your advisor moves to the next buyer.

Your decision

Accept the offer, negotiate, or decline and go back to other buyers.

Outcome of due diligence

Contracts are signed, or the deal falls over and the business goes back to market.

Where to Start

Every sale begins at stage 1. A free, confidential appraisal tells you what your business could be worth before you commit to anything.