Transaction roadmap
A structured left-to-right transaction guide from the first buyer approach through confidentiality, offer, due diligence, suspensive conditions and takeover.
For longer processes, the next row does not reverse direction. It starts again from the left, making the document easy to follow and easy to present to buyers, sellers and advisors.
The buying process is best managed as a controlled sequence: protect confidentiality, formalise the offer, investigate thoroughly, clear suspensive conditions and then complete the operational handover.
2 steps • ±5 days
3 steps • ±13 days
2 steps • ±15 days
4 steps • parallel / condition-dependent
1 step • ±14 days
Qualify the buyer, secure confidentiality and release information responsibly.
The Prospective Buyer approaches the Business Consultant ("Consultant") demonstrating his or her interest to purchase a business
Buyer to complete and sign the Non Disclosure / Confidentiality Undertaking / Net Worth Agreement ("NDA") and return via email to the Consultant
The Consultant supply the Buyer with a fully fledged Business presentation covering all aspects of the business.
The Buyer indicates interest in the business and the Consultant arrange appointment for Buyer to view the business and have discussion with the Seller.
To safeguard confidentiality they meet away from the business, Seller could take the Buyer through the business thereafter.
Move from interest to written intent, negotiation and deposit discipline.
The Buyer decides to pursue the opportunity in terms of making an Offer to Purchase
Consultant compiles as a minimum a Letter of Intent (LOI) or an Offer to Purchase (OTP), ensuring that all aspects are fully covered. Buyer scrutinizes with Legal advisor and then signs the agreement
LOI or OTP to include details pertaining to the Net Income, etc.
Consultant presents the LOI or OTP to the Seller, negotiate the transaction and ensures there is a deadline for acceptance
Seller scrutinize LOI or OTP, take it to his Attorney and if satisfied signs the agreement or rejects it
Counter offer may follow. Consultant will assist with follow up negotiations. Assume all the parties sign
Each party is supplied with a fully signed copy of LOI or OTP.
The buyer may proceed with Due Diligence or if the seller insists
Pay a minimum deposit of 10% of the purchase price into the Trust Account of the Consultant.
Request, receive and test the financial and operational information.
Buyer request information in writing required to conduct Due Diligence investigation.
Typical info needed: Management and VAT reports; Personnel, Proof of Income and Expenditure, etc.
Seller has five working days to gather all the information so needed to conduct the Due Diligence.
Buyer upon receipt of information will evaluate / screen information, most probably visit the business to view the Financial records with his Accountant.
Buyer to respond in writing stating his acceptance in terms of the correctness of the information or state his rejection of the figures together with reasons.
Normally allow five to ten working days for the Buyer to perform Due Diligence from the time that the Seller has supplied all the information.
Clear the conditions that can make, change or terminate the transaction.
If the Due Diligence result is not in line with the business presentation / financial information
Buyer is free to cancel the agreement or renegotiate the terms of the agreement
If the due diligence does not substantiate the information, then the Buyer is free to cancel the agreement and the deposit will then be refunded to him
Upon signature of the agreement the Buyer must apply for finance if this was specified as a Suspensive Condition in the agreement.
Apply to financial institution. Normally takes between 5 - 20 days for approval in principal to be granted.
If the bank declines the loan application then the Buyer is free to cancel the agreement and the deposit will then be refunded to him
Seller or the Consultant will arrange the meeting with the landlord.
Negotiate terms of lease on conditions acceptable to the Buyer but in line with existing Lease Agreement.
If the same terms and conditions cannot be obtained then the Buyer is free to cancel the agreement and the deposit will then be refunded to him
If an Oil Company or Franchiser is involved, approval will have to be obtained from them to appoint the prospective Buyer as a franchisee or Dealer and furthermore apply for license via Department of Energy (D.O.E)
A Business plan would be required for submission to the oil company and application to D.O.E. Business Consultant or others could complete this in collaboration with the Buyer.
If the Buyer is turned down by the Oil Company, D.O.E. or Franchisor then the Buyer the agreement will lapse and the deposit will then be refunded to him
Complete stock, payment, effective date handover and seller support.
Buyer & Seller conduct stock check and Buyer pays the Seller for the basic price together with the stock.
Take over the business on the Effective Date. Seller remain on in the business in order to train the Buyer in all aspects of the Business.
Normal support to Buyer free of charge for one month, thereafter at mutually agreed tariff
Structured business transactions, buyer engagement, presentation preparation and deal-flow support.
Information will only be released until the fully completed and signed NDA document is in the possession of the Consultant