Valzura

Professional Tools

Exit Planning Toolkit

NDA templates, letter of intent frameworks, buyer due diligence checklists, and seller preparation guides. Everything you need to prepare for a successful business sale.

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In This Toolkit

Non-Disclosure Agreement (NDA)

A mutual non-disclosure agreement protects both buyer and seller during the due diligence process. This template covers confidential financial data, customer lists, trade secrets, and proprietary business information.

Key Sections to Include

  • 1
    Definition of confidential information
  • 2
    Mutual obligations of confidentiality
  • 3
    Permitted disclosures (advisors, attorneys, accountants)
  • 4
    Term and survival period (typically 2–3 years)
  • 5
    Return or destruction of materials
  • 6
    Non-solicitation of employees
  • 7
    Remedies for breach (injunctive relief)
  • 8
    Governing law and dispute resolution

Tips

  • Always execute an NDA before sharing financials with any potential buyer
  • Include a non-solicitation clause to protect your employees
  • Define a clear expiration date, 2 years is standard for M&A NDAs
  • Require that the buyer's advisors also be bound by confidentiality

Letter of Intent (LOI) Framework

A letter of intent outlines the key terms of a proposed acquisition before entering binding agreements. It establishes the purchase price, deal structure, and conditions that must be met before closing.

Essential LOI Terms

  • 1
    Purchase price and payment structure
  • 2
    Asset sale vs. stock sale election
  • 3
    Earnout provisions and contingent payments
  • 4
    Seller financing terms (if applicable)
  • 5
    Exclusivity / no-shop period (30–90 days)
  • 6
    Due diligence scope and timeline
  • 7
    Key employee retention requirements
  • 8
    Non-compete and transition assistance
  • 9
    Representations and warranties overview
  • 10
    Closing conditions and target date
  • 11
    Escrow and holdback provisions
  • 12
    Allocation of transaction costs

Tips

  • Negotiate the exclusivity period carefully, 60 days is standard
  • Clearly define which terms are binding (NDA, exclusivity) and which are non-binding (price, structure)
  • Include a breakup fee to protect against bad-faith termination
  • Specify working capital targets to prevent pre-closing manipulation

Buyer Due Diligence Checklist

A comprehensive checklist of documents and information a buyer will typically request during due diligence for a small-to-mid-market business acquisition. Being prepared accelerates the deal and builds buyer confidence.

1Financial Records

  • 3 years of tax returns (federal and state)
  • 3 years of P&L statements (monthly preferred)
  • Balance sheets (current and 2 prior years)
  • Cash flow statements
  • Accounts receivable aging report
  • Accounts payable aging report
  • Inventory valuation report
  • Capital expenditure history (3 years)
  • Debt schedule (all loans, lines of credit, leases)
  • Owner compensation and perks documentation
  • Revenue by customer/client (top 10–20)
  • Revenue by product/service line
  • Add-back schedule with supporting documentation

2Legal & Compliance

  • Business formation documents (articles, bylaws, operating agreement)
  • All active contracts and agreements
  • Lease agreements (real estate and equipment)
  • Intellectual property registrations (trademarks, patents, copyrights)
  • Licenses and permits
  • Pending or threatened litigation
  • Insurance policies and claims history
  • Environmental compliance records (if applicable)
  • Regulatory filings and compliance certificates

3Operations

  • Organizational chart
  • Employee roster with roles, tenure, and compensation
  • Employee handbook and policies
  • Key vendor and supplier agreements
  • Standard operating procedures (SOPs)
  • Technology systems inventory (software, hardware)
  • Website traffic and digital marketing analytics
  • Customer contracts with renewal dates
  • Warranty or guarantee obligations

4Customer & Market

  • Customer concentration analysis
  • Customer retention/churn rates
  • Sales pipeline and backlog
  • Marketing materials and brand assets
  • Competitive landscape overview
  • Industry trends and market size data
  • Customer reviews and Net Promoter Score (if available)

5Real Estate & Assets

  • Property appraisals (if owned)
  • Lease terms and renewal options
  • Fixed asset register with depreciation schedules
  • Vehicle titles and registrations
  • Equipment maintenance records

Seller Preparation Guide

A step-by-step guide for business owners preparing to sell. Follow this timeline to maximize your sale price and minimize time on market.

12–24 months before listing

Foundation

  • Run a valuation to establish your baseline value
  • Clean up financial records, ensure 3 years of accurate P&L and balance sheets
  • Eliminate personal expenses flowing through the business
  • Document all owner add-backs with supporting evidence
  • Reduce owner dependency, delegate key relationships and decisions
  • Document standard operating procedures for all critical processes
  • Address any deferred maintenance on equipment or facilities
  • Resolve any pending legal issues or disputes
6–12 months before listing

Optimization

  • Focus on growing recurring revenue and long-term contracts
  • Diversify your customer base if concentration is high
  • Lock in key employees with retention agreements or incentives
  • Renegotiate favorable lease terms (buyers value long remaining terms)
  • Build a management team that can operate without you
  • Obtain a quality of earnings (QoE) report if revenue exceeds $2M
  • Interview and select a business broker or M&A advisor
  • Update your Valzura valuation to track improvement
3–6 months before listing

Pre-Market Preparation

  • Prepare a Confidential Information Memorandum (CIM)
  • Compile the full due diligence data room
  • Engage your tax advisor on deal structure preferences (asset vs. stock sale)
  • Identify your ideal buyer profile (strategic, financial, owner-operator)
  • Set realistic price expectations based on your valuation and market data
  • Execute an engagement letter with your broker/advisor
  • Brief your attorney on the upcoming transaction
Active sale process

Marketing & Negotiation

  • Review all NDAs before sharing financials
  • Qualify buyer interest and financial capacity early
  • Maintain business performance throughout the process
  • Negotiate LOI terms carefully, focus on total consideration, not just price
  • Be responsive during due diligence to maintain buyer confidence
  • Plan your post-sale transition (typically 3–12 months)
  • Work with your attorney to review and negotiate the Purchase Agreement
  • Close the deal and celebrate

Closing Day Checklist

Everything that needs to happen on closing day to transfer ownership smoothly.

  • Execute the Asset or Stock Purchase Agreement
  • Execute the Bill of Sale (asset sales)
  • Execute the Assignment and Assumption Agreement
  • Execute the Non-Compete Agreement
  • Execute the Transition Services Agreement
  • Execute the Employment Agreement (if staying on)
  • Wire transfer of purchase price to escrow
  • Release of escrow funds per closing instructions
  • Transfer all business licenses and permits
  • Transfer domain names, social media accounts, and digital assets
  • Update bank account signatories
  • Notify key customers, vendors, and employees
  • Transfer insurance policies or bind new coverage
  • File UCC-3 termination statements (if paying off seller's liens)
  • Record any real estate transfer documents
  • Deliver all passwords, keys, and access credentials

Know Your Number Before You Negotiate

A defensible valuation is the foundation of every successful exit. Run your free valuation now and get the data you need for NDA discussions, LOI negotiations, and buyer due diligence.

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