PART FOUR

Making an Offer

You seem to have found the small business that you have been searching for, one that has survived all of your filters. But before you make an offer to buy the company, you need to learn more about it to determine if the prospect is, in fact, a good acquisition candidate. We describe this process in chapter 13, “Preliminary Due Diligence.” If you decide to pursue the prospect after completing preliminary due diligence, you’ll need to determine a reasonable offer price and other acquisition terms. We provide guidance on pricing in chapter 14, “How Much Should You Pay for a Small Business?,” and other terms in chapter 15, “Deal Terms.” These come together in a formal offer, called a letter of intent, which we cover in chapter 16, “The Offer.”