How To Prepare a Purchase Offer for a Business

If you’re interested in buying an existing business, you need to make an offer to the seller in writing. This will let the existing business owner know you are serious about your intentions and will clearly spell out the terms of your offer.

Here’s how to prepare a purchase offer for a business.

  1. Before you make an offer, do your research. Make sure you have done your homework and you know that the business you are planning to buy is the best one for you. If the owner is selling, find out the reason why and make sure you have the capability and resources to turn things around. You don’t want to make an offer for a business that will continue to be unsuccessful under your management. There has to be untapped potential and you must be clear about your own business plan. Check around the area for competing businesses that may also be of interest to you.
  2. Once you are decided on the business you will buy and you have done the appropriate research, it’s time to write a proposal. Find out whom to address your offer to. It is best to go to the business site itself and ask the manager who owns the business. Get all the contact information.
  3. When writing your letter, be upfront and straight to the point. Introduce yourself and write out your intention to buy the business. You don’t need to explain why.
  4. Be clear about your terms. How much exactly are you offering to buy it for and what are the terms. Will you buy it as a one time cash payment or will you do a down payment and give the rest as post dated checks? Make the purchase price fair and reasonable. You will need to research how much similar businesses are going for or how much it would cost to start up. Your purchase price should be an amount you can recover once you take over the business.
  5. Indicate what is exactly is included in your offer. Are you buying the land and the structure, including all equipment? If the business uses any specific formulas or recipes that are unique to them, make sure you indicate that you want that included as well. Are you taking over the lease agreement until the end of the lease term? Are you buying the business to continue the brand or will you rename it once under new management? Will you offer to consider retaining existing employees?
  6. Explain that you may need to see further documents before the offer is finalized, such as a copy of the lease contract or previous tax returns.
  7. Indicate a sense of urgency. Explain that the offer is one made in good faith but your offer is only valid up to a certain amount of time for consideration. You want the owner to consider your offer seriously and to give you an indication or answer as soon as possible.
  8. End the letter saying you would like to meet with him soon to further discuss the proposal and so you may go over any clarifications. Put your contact information and the best time to reach you.

Have a lawyer go over your offer before sending it out. If your purchase offer proves to be irresistible, the owner will contact you as soon as possible to negotiate terms. Good luck!


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