Screening Buyers

Phased Screening Process

Buyers are evaluated in phases. This allows us to thoroughly screen them and ensure a mutual exchange of information at measured stages as the sale unfolds. Buyers are screened more thoroughly at various steps of the process to ensure they are qualified before they receive additional confidential or sensitive information on your business.

Releasing information in phases gives you a chance to further review the buyer and also lets the buyer become more interested in your business slowly, over time. Ultimately, releasing information in phases saves time, preserves confidentiality, and ensures that unqualified buyers are not provided information about your business.

Our first step in determining if they are serious contenders is to ask them to fill out a non-disclosure agreement (NDA). Buyers will be given access to your confidential information memorandum (CIM) after they have signed the NDA.

If the buyer is interested once they review your CIM, they may:

  • Request to meet you personally
  • Request additional information (e.g., financial statements)
  • Make an offer

Should the buyer decide to make an offer, they will complete the Term Sheet if they are an individual or submit a letter of intent (LOI) if they are a company. Individuals will also have to disclose more detailed information about themselves if seller financing is involved, including a credit report, a highly detailed financial statement, and a buyer disclosure agreement.

Here’s what to share BEFORE an offer or LOI is accepted:

  • CIM
  • 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

These are documents that should be shared only AFTER an offer or LOI has been accepted:

  • Federal income tax returns
  • Bank statements
  • Invoices and receipts
  • A full copy of the lease
  • Leases, such as premises and 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, health, and liability insurance
  • Equipment inspection reports
  • Licenses and permits
  • Marketing, advertising, and promotional documents
  • Environmental documents and inspections
  • Franchise-related documents


Following are tips for working with buyers.

  • Stay away from buyers who have been in the market for too long: Individual buyers (as opposed to companies) should be able to identify a business and make an offer within six to 12 months. They should be able to close on a business within 12 months of starting the process. If the buyer has been in the market for over a year, you may have problems. Occasionally, we see buyers who have been in the market for one to two years; however, we almost always dismiss buyers if they have been looking for over two years. One to two years is a coin toss, but a buyer who has been in the market for over two years is a red flag.
  • Wait until an offer is made before sharing tax returns: Do not share tax returns or bank statements until after you accept an offer. The buyer can inspect those during due diligence.
  • Defer all negotiations to Morgan & Westfield: Avoid negotiating with any buyers you meet. Defer all negotiations to us.


  • No. Based on our experience, only a small number of buyers provide inaccurate information, so verifying each buyer’s entries is impractical and will likely scare buyers away this early in the deal.

  • If you know or talk to any buyers who may be interested in your business, please send an email with their contact information to [email protected], or have them email us directly at [email protected], and we will send them a link to a non-disclosure agreement (NDA) for your business.

  • Tell the buyer that tax returns, bank statements, and other sensitive documents will be released only after an offer is accepted, during the due diligence period.

  • It takes two to four months to close, on average, once an offer or LOI is accepted. We have closed some transactions in as little as one month, and others have taken more than six months. It generally takes one to two months for due diligence and another one to two months to close once due diligence is complete. The process can take longer if third-party financing is involved or if complications arise during the process.