The first information in the disclosures process is that input into and analyzed by ValuPro in the valuation process, typically including the last 5 years CA/CPA prepared FYE financial statements. It will often include monthly year-to-date internals as well and sometimes historical internals on a monthly basis. It will also include information about the marketplace trends, customer base, suppliers, employees and other operational detail.

While potential buyers will want to receive quantitative information quickly in order to measure a level of interest or lack thereof, and while the preponderance of confidential information disclosed in the process will be that pertaining to the business-for-sale, the owner/seller will also want assurances as to the legitimate intent and ample capabilities of the buyer, and disclosures with regard from the buyer will be required in the process outlined below. 

Disclosure-1: The first of the disclosures will be the limited but material information incorporated in the business-for-sale ad. 

See: sample ad

Disclosure-2: The Introductory Profile is the first disclosure release to an inquiring buyer. It should NOT identify the business but should provide a brief financial summary and a general introduction to the type and/or nature of the business. It should also include a confidentiality agreement for completion, execution and submission by the potential buyer.

See: sample profile 7-eIntro

Disclosure-3: In order to obtain additional information, the buyer should be required to complete, execute and return/submit the confidentiality agreement.

See: sample profile confidentiality agreement

Disclosure-4: The Financial Profile should NOT identify the business but should provide a more complete disclosure of financials and outline the basis on which the business has been valued and priced, and will otherwise expand on the general business description.

See: sample profile 8-eFinanc

Disclosure-5: A Buyer’s Profile form complete with buyer contact questionnaire and net worth statement (or balance sheet) should be included in the Introductory Profile. A similar but more complete electronic form through which buyers can demonstrate fit and capabilities is available on-line at Business-Trader.com. To obtain addition information, buyer should be required to complete and submit a Buyer’s Profile or something that will otherwise demonstrate intent and capabilities.

See: buyer profile

Disclosure-6: The Business Profile may still NOT identify the business by name or definition. The Business Profile should provide the most complete disclosure of current and historical financials, assumptions with respect to sustainability of revenues, earnings, cash flow, and a written explanation of company history; current ownership; reasons for selling; it will describe business operations, its marketplace and customer base, its suppliers, competition, business premises, employees, employee and owner compensation, etc.

See: sample profile 9-eProfile

Disclosure-7: Thereafter, if interest continues and the parties are identified, there will typically be a meeting between the two, which will often coincide with or be followed by a tour of business facilities, questions and answer between the parties and requests for specific information that may not have been adequately addressed in the profiles. 

Disclosure-8: Finally, should buyer’s interests ultimately lead to an Offer to Purchase, such offer should include a subject to due diligence clause whereby buyer and seller will each be granted all necessary access and time to confirm the respective representations of the parties theretofore.  

This final disclosure will then be through full access to the buyer of all books, records, operations and other relevant information of the business, and open access to that required by the seller to confirm capabilities of the buyer.

See: sample due diligence
See: sample offer to purchase