Releasing Information in Phases 

When it comes to preparing your key sale documents, it’s important to note that these documents will be released to the buyers in phases. As buyers become more serious about purchasing your business, you can release more and more specific information. This not only protects you from releasing sensitive information to competitors, it also keeps buyers actively engaged in the process. This release of information should be paired with the buyer releasing information to you, as well. Before you release key financial and operational documents, you should already know the buyer is qualified to purchase your business.

Here’s an abbreviated description of the process:

  • The buyer signs and submits an NDA.
  • After the NDA is approved, the buyer receives additional information on your business.
  • The buyer meets you and receives more information on your business.
  • The buyer submits an LOI and begins due diligence once it’s accepted.

The Documents

In the beginning of the sales process, you’re making claims that aren’t verified until an offer is accepted and the buyer moves into due diligence. 

Here’s what to share before you accept the letter of intent:

  • Confidential information memorandum
  • Profit and loss statements (P&Ls)
  • Balance sheets
  • Summary or abstract of the lease, but not the entire document
  • Equipment list
  • Sales literature and brochures

Here’s what to share after you accept the letter of intent:

  • Federal income tax returns
  • Bank statements
  • Invoices and receipts
  • Full copy of the lease for any premises
  • Equipment leases
  • Third-party contracts, such as supplier or vendor contracts
  • Sales and use tax reports
  • Staffing and payroll-related documents, including job descriptions and employment contracts
  • Insurance-related documents such as workers’ compensation, as well as health and liability insurance
  • Equipment inspection reports
  • Licenses and permits
  • Marketing, advertising, and promotional documents
  • Environmental documents and inspections

How the Numbers Work

When it comes to releasing information to buyers in phases, it’s important to realize that the number of qualified and interested buyers will decrease at every step of the transaction. Here’s how the numbers might work in a typical transaction:

  • Interested buyers: 100 
  • The number of buyers who sign a non-disclosure agreement and receive your CIM: 80
  • The number of buyers who respond with questions or interest: 30
  • The number of buyer meetings: 15 to 20
  • The number of second meetings with buyers: 5 to 10
  • The number of LOIs received from buyers: 2 to 7 

As you can see, the sale of a business can be compared to a sales funnel. There are major steps along the way, and buyers drop off at each step. 


By examining the major stages of selling a business and preparing for each one, you can dramatically improve your chances of a successful sale. 

Your two-to-three-page teaser profile should be written in a way that drums up interest in your business without divulging its identity. Then, after the buyer signs an NDA, comes the CIM, a 20-to-40-page document that includes the name of the business along with more details about your company. After meeting with you a time or two to receive even more information about the business, the buyer submits an LOI, after which due diligence begins.

Congratulations! You’re on your way.