The Closing, together with the Negotiations, are probably the stages of a business deal that are the trickiest to manage. Once an offer has been accepted by the seller, gathering all the necessary information to close is extremely important.
In many cases the parties go to a closing attorney too early in the process – before making sure that all the loose ends of the deal are tied up. This is why, one of the main objectives of a knowledgeable business intermediary is to manage the process and make sure that going to a closing is a natural next step rather than a surprise to the parties involved.
Removing of contingencies is one of the main goals of a due diligence period when moving towards a closing. In this regard, it is very important for an offer to contain only contingencies which are meaningful and actually can be waived in reality. The more a buyer already knows and understands the business, even prior to putting the offer, the better the chance of only including contingencies which are necessary.
Dealing with landlords and removing contingencies in regards to the lease is another important aspect in a successful closing. It is important that a lease contingency is reasonable and actually corresponds to the actual terms of the existing lease. It is important that the seller has already established contacts and prepared the landlord for the possibility of the selling of the business. If a landlord has not been contacted and prepared previously, lease contingencies can be a real impediment to a successful closing.
While complicated and somewhat overwhelming, the closing process – when managed properly and executed in a timely manner – does not have to be the stumbling block it has sometimes proven to be. The use of an intermediary who is experienced and knows this process well is highly beneficial and significantly increases the chances of successful business transaction.