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Buyers Services

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NON-DISCLOSURE/CONFIDENTIALITY: Buyers seeking to purchase a business that is up and running need to be aware that the Seller has placed a heavy responsibility on his Broker to maintain strict confidentiality and non-disclosure. This requires that all potential Buyers read and sign a Non-disclosure/Confidentiality Agreement that is provided either by the Broker or, in some cases, by the Seller’s Attorney. Business Brokers and Business Counselors will in ALL cases ask the Buyer to sign their NDA (Non-Disclosure Agreement) before disclosing the name or location of the prospective business. Buyers ask what all the secrecy is about and this is the answer: Employees, clients, suppliers, landlords and competitors are the people that must not know of the sale until the appropriate time. If employees discover that the business is for sale, they may “jump ship” causing damage to the business; Competitors will knowing that the business is up for sale will try to steal customers, again-monetary damage to the business…in any case, confidentiality is extremely important to maintain until the timing is right and a qualified and financially capable Buyer is in place with an accepted Earnest Money Agreement.

BUYER FINANCIAL STATEMENT: Before a Buyer begins the process of looking for a business to buy, he/she should have an up-to-date Financial Statement (bank generated if possible) and resume prepared for the Sellers review as well as his/her latest Credit Score.

BUYER SKILL LEVEL: Buyers should know their strengths, weaknesses and skill level so that your search will be directed to those businesses that fit your skill levels.

PREQUALIFICATION: As a Buyer, you should have a Banker in place who knows you and your financial position and, preferably, be pre-qualified for a loan if the business itself is financially qualified for one. (Most Brokers will submit their business listing to several lenders to see who is interested in financing the sale)

AGENCY: When working with a Business Broker or Business Intermediary, you should know that, in most cases, the broker represents the Seller and owes him / her their allegiance. However, a good Broker will be able to assist you in many ways that will be to your advantage.

  • He will treat you honestly and fairly and provide “Full Disclosure” regarding any business that he is representing.
  • He will assist you in interpreting the businesses financial statements, how the price of the business was arrived at and how the business will pay for itself, pay you a living wage and give you a return on your investment.
  • The Broker will assist you in obtaining a tour of the business by coordinating with the Seller. (Tours are normally done before opening or after closing due to confidentiality issues)
  • The Broker can assist you in writing your Earnest Money Offer or Letter of Intent since he/she will know many of the specific items that will be needed to protect both you and his Client.


The following are some of the contingencies and conditions that will be in most, if
not all offers. Your Broker will assist you with other specific contingencies or conditions.

  • Books and Records Contingency
  • Financing contingency
  • Lease contingency
  • License contingency
  • Non-Compete Agreement
  • Inspection contingency
  • Training agreement
  • Franchisor acceptance

Once an offer is accepted, the Broker will help you in the Due Diligence process by obtaining additional data that your bank, lender or attorney will require. In many cases the Broker will be able to help you with the landlord as you attempt to obtain a lease or lease assignment.


  • Why is the business being sold? Make sure you are satisfied with the answer.
  • How long has the business been in business?
  • How long has the business been owned by the present owner?
  • Are you, as the Buyer of the business, ready and willing to put the time and effort into the business to maintain ongoing and consistent cash flow? Find out how many hours the Seller puts in daily or weekly; what his main job or jobs are. Then ask yourself, “am I ready to do this?”
  • What are the terms of the lease? Is it assignable and for how many years? How many options are there? Is it a Fair Market Rent?
  • How many family members are working in the business?
  • Are they going to stay or will they have to be replaced?
  • Are there good books and records for the business?
  • Are the taxes co-mingled with another business? Does the Seller have separate P & L’s for the business you are interested in?
  • What makes the business unique or different form the competitors?
  • How involved is the Seller in the business and what will happen to the business when he/she is no longer around. (This is a good time to talk about the transition or training period)
  • Who are the suppliers? Are they on a ‘cash on delivery’ basis or a billing basis?
  • How many employees, managers or key people? What are their wages, benefits and vacation schedules? How many will stay. (A Buyer should know that in the State of Oregon and Washington, that at the time of sale, all employees must be let go by the Seller and re-hired by the Buyer; your Broker will explain how to do this smoothly without getting the employees excited or fearful)
  • Are there going to be equipment and/or automotive contracts that will have to be assumed? How many, how much, and how long? Are any in arrears?
  • What kind of licensing and/or special licensing does the business have and will any of them require the Buyer to go to school or have special skill to acquire them?
  • If a Buyer is contemplating a restaurant or bar, an OLCC or WLCC will be required. If in Oregon, and wants the Oregon Lottery, the Buyer must be squeaky clean; no DUI’s or Felony Convictions. The OLCC and Lottery, in most cases, will not give you a license if the background check reveals any issues.
  • All Buyers should have an attorney that has experience in reading or writing business Purchase and Sale Agreements. And an accountant who understands how “Recasting Financial Statements” is done and why.
  • A Buyer should always do a walk-through with the Seller, Broker and an equipment list and do a check off all equipment; adding or subtracting items as needed…it would be unusual for a Seller to have ALL his equipment listed on the Equipment List.
  • Buyers should always discuss with their accountant, the Allocation of the Selling Price as it applies to them and make sure that the Seller is in agreement prior to Closing. If you don’t know what Allocation of Purchase Price is, ask your Broker.
  • It is always good to know what, if any, highway or road changes; building projects are scheduled in you area in the near future and how that may affect your new business.
  • Make a special point to go over any and all types of advertising that the Seller is using and what the outcome typically is.
  • Ask the Seller what clients or clientele make up the most of is income; or how many accounts does he have and how many of them represent the most dollar volume.

As a Buyer, you are sure to have more questions as you investigate a particular business; questions that are specific to that industry, however, the above information is enough to get you started in the right direction.

4141 SE Schiller Street, Portland, OR 97206

Ladd C. McGowan-Senior Business Analyst/Counselor-Intermediary
Phone: 503-680-5887 Fax: 503-595-6955