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.
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
- 1Definition of confidential information
- 2Mutual obligations of confidentiality
- 3Permitted disclosures (advisors, attorneys, accountants)
- 4Term and survival period (typically 2–3 years)
- 5Return or destruction of materials
- 6Non-solicitation of employees
- 7Remedies for breach (injunctive relief)
- 8Governing 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
- 1Purchase price and payment structure
- 2Asset sale vs. stock sale election
- 3Earnout provisions and contingent payments
- 4Seller financing terms (if applicable)
- 5Exclusivity / no-shop period (30–90 days)
- 6Due diligence scope and timeline
- 7Key employee retention requirements
- 8Non-compete and transition assistance
- 9Representations and warranties overview
- 10Closing conditions and target date
- 11Escrow and holdback provisions
- 12Allocation 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.