Business owners contemplating selling their company need to understand a host of important concepts and issues associated with the sale process and transaction. During the sale process, it is likely you will encounter two similar acronyms: IOI and LOI. While sounding nearly the same, these two terms represent very different steps in the sale process, and it is important to understand what each acronym stands for and how it is used. This article explains the meaning of IOI and LOI, explains the difference between these steps in the sale process, and offers guidance to business owners on how to use this knowledge to help prepare themselves and their company for a potential sale.
A frequent question we hear from business owners contemplating a sale of their company is “What is a Quality of Earnings (QofE) study?” Owners are asking because it has become increasingly common that potential sellers are advised to get a QofE study as part of their preparations. This article explains the concept of quality of earnings, shows how a QofE study is different from an audit, and highlights the significant advantages that business owners create by securing a QofE study before launching a process to sell their business.
In Part 1 of this series, we examined how to handle the stream of inquires that you may receive about potentially selling your business. We also discussed how to conduct an introductory call with an inquirer if you decide to investigate a specific opportunity, including important mistakes to avoid and information you should gather.
This is Part 2 of a three-part article series. In Part 1 of this series, we examined how to handle the stream of inquires that you may receive about potentially selling your business. We also discussed how to conduct an introductory call with a inquirer if you decide to investigate that opportunity, including important mistakes to avoid and information you should gather. Finally, we left off with asking the potential buyer to send a non-disclosure agreement (NDA) if you wish to continue the discussion with that party. From this point, let’s look at the next steps.
If you are like most business owners, you probably receive a regular flow of emails and phone calls seemingly offering to buy your company. Private equity (PE) firms and strategic buyers are sitting on record amounts of cash and must make acquisitions to hit their business objectives. Everyone is waiting for the flood of baby-boomer business owners selling their companies, but it never seems to come. As a result, there is too much money chasing too few acquisition opportunities. While this is generally a good thing for business owners, a stream of unsolicited offers or inquiries can grow into an unwelcome time sink if not handled correctly. Also, if you are not careful in how you respond to these offers, you can harm your company by potentially sharing sensitive information with a competitor or sparking rumors that your company is on the market. So, what steps should you take when you receive an unsolicited offer?