What Happens After the Offer – Meetings, Due Diligence, and Closing

Part 3: What Happens After the Offer: Meetings, Due Diligence, and Closing

This article is part of our series, “The Real Story of Selling Your Shop.” Each post covers a different phase of the selling process so you can navigate it with confidence. If you’re new to the series, you can start at the beginning here.

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From Offer to Closing: The Steps Ahead

Accepting an offer is exciting, but it’s not the end—it’s the beginning of due diligence and final negotiations. Here’s what to expect.

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1. Letter of Intent (LOI)

Once you and the buyer agree on price and basic terms, they’ll provide an LOI:

· Summarizes the deal structure, price, and timeline.

· Outlines next steps before a formal contract.

· Allows you to negotiate finer details before engaging attorneys to help negotiate formal legal documents.

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2. Due Diligence

“Trust, but verify” – This is where buyers dig deep to understand intricate details of your business:

· Financials: Bank statements, tax returns and filings, monthly profit/loss statements, debts, and balance sheet analysis.

· Employees: Payroll detail, compensation plans, benefits programs and contributions, non-payroll benefits (PTO, cash bonuses, incentive plans, etc.), employment agreements.

· Legal: Material contracts, ownership structure, operating agreements and company bylaws, and outstanding litigation.

· Operations: Vendor lists, inventory management, point-of-sale system, shop workflow, teammate roles and responsibilities.

· Compliance: Licenses, environmental or zoning considerations.

Be prepared to answer questions quickly and clearly. Organized records keep this process smooth.

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3. Legal Documentation

The devil is in the details – while it’s not anyone’s favorite part of the process, the definitive agreements determine the allocation of risk between the buyer and seller in the event things don’t go as planned. Some of the key documents include:

· Business purchase agreement (stock or assets)

· Lease agreement or real estate purchase agreement

· Disclosure schedules

· Ancillary agreements (bill of sale, officers’ resolutions, promissory note or escrow agreement, certificates of good standing, etc.)

· Funds flow

It’s normal for disagreements to occur during the drafting and negotiation of legal documents; remember to take a deep breath, focus on what’s important, and be willing to negotiate to land at a point that’s equitable for both sides.

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4. Staff Communication Plan

The timing and messaging of the announcement to employees is a key piece of the transition process. Telling employees too early can cause anxiety or fear of the unknown, while holding out too long may leave a buyer unable to properly prepare for the transition. Plan with the buyer:

· Timing: Typically shortly before closing is complete.

· Message: Highlight stability, and new opportunities and value-add benefits for the team.

· Process: Ensure the employees understand what the transition will entail and key milestones along the way.

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5. Closing Timeline

Most deals close in 60–120 days, depending on complexity and responsiveness. Avoid big operational changes during this time unless discussed with the buyer to maintain confidence.

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Key Takeaway:

Due diligence is a verification process, not a trap. Preparation and transparency are the best ways to keep your deal on track and avoid last-minute hiccups.

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Next Steps in This Series

· Looking for more tips? Our Bonus Tips are on the way.

· Want a step-by-step checklist for due diligence? Download our Seller’s Guide PDF. Get your copy below.

· Thinking about selling? Contact us for a confidential discussion.

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