Chapter 8
Preparing a Purchase Offer
IN THIS CHAPTER
Creating a Letter of Intent (LOI)
Crafting a purchase offer with contingencies and price allocations
Exercising due diligence
Once you’ve honed in on a desirable business and done some analysis and consultation of experts to determine its approximate value (see Chapter 6), and figured your financing options (see Chapter 7), the next step is to put together a purchase offer. If you’ve bought a house or other real estate before or attempted to make such a purchase, then you’re pretty familiar with many of the elements we’re going to discuss in this chapter.
Buying a business is generally much more complicated and involved than buying a home, so the process typically starts with an expression of interest and general parameters (Indication of Interest) followed by the outlines and more details of an offer in a Letter of Intent. In addition to explaining these in detail in this chapter, we also discuss the typical contingencies your offer should include and what due diligence you should perform before closing on your deal.
Writing a Letter of Intent or an Indication of Interest (IOI)
Usually many months into the process of looking ...