Practical next steps for a smooth, successful closing
Signing the contract to sell your business is a big milestone—but it’s not the finish line. There’s still important work to do to get from “signed” to “sold.”
Here’s a clear, plain-language roadmap so you know what to expect and can stay in control of the process. Collaboration with your attorney team is essential to a smooth transaction and closing.
1. Understand What You Just Agreed To
Your purchase and sale agreement isn’t just a piece of paper—it’s a detailed checklist of who does what, by when, and under what conditions.
- Re-read it carefully—or review it with your attorney—to confirm deadlines, required documents to you will need to provide the Buyer, and contingencies.
- Flag critical dates—such as due diligence periods, financing approval deadlines, and the scheduled closing date. Failing to meet the deadlines could derail the deal. Be prepared that extensions may be required in some circumstances but it is important to plan to meet the deadlines unless the reasons is for circumstances outside your control (like waiting on an updated survey and abstract or a report from a third party inspector).
- Know your responsibilities—you may still have obligations like keeping inventory at agreed levels, maintaining confidentiality of the potential sale from your employees or maintaining contracts in place and renewed until the sale closes.
2. Cooperate with Due Diligence
The buyer will likely have a period to review your financials, contracts, licenses, leases, and other business records.
- Get documents ready and organized—tax returns, bank statements, vendor contracts, customer agreements, employee records, and permits. Expect you will need to gather 3 years prior and the current year to date financials.
- Be organized and responsive—a smooth due diligence process builds trust and reduces delays. Keep a record of what you have provided and when.
- Protect sensitive information—make sure any confidential and proprietary data is only shared under a signed non-disclosure agreement.
3. Work Through Contingencies
Most business sales are conditional. Common contingencies include:
- Financing—the buyer may need loan approval to pay the purchase price.
- Landlord consent—if there’s a lease, the landlord often must approve the new tenant.
- Licenses and permits—for certain businesses (liquor, cannabis, professional services), regulatory approval is essential.
- Franchise and key supplier agreements – for certain businesses, there may be franchisor or key supplier agreements that require consent to transfer to the Buyer. These are typical with hotels, franchised restaurants and petroleum related businesses such as gas stations and convenience stores.
You may need to help the buyer meet these conditions by providing letters, signatures, or other cooperation.
4. Keep the Business Healthy Until Closing
The contract usually requires that you run the business as usual until the deal closes.
- Don’t cut corners—keep staffing, inventory, and customer service steady. If something breaks, you will need to get it repaired to deliver the business in operating condition to the buyer.
- Avoid unusual changes—major price increases, new debts, new hires or big purchases may require the buyer’s consent.
This protects your sale price and keeps you in compliance with the agreement.
5. Prepare for Employee Transitions
- Check your agreement—some buyers will keep your employees, others may not.
- Plan communications—coordinate with the buyer on when and how employees will be told. Some buyers want to give the employees a heads up and start to get to know them prior to closing while others won’t want them to know anything about the sale until after it closes.
- Handle final payroll and benefits—make sure all wage and benefit obligations are met. You may need to send notices for benefits and insurance transitions and be prepared to pay out accrued time off for employees being terminated.
6. Organize for Closing Day
The closing is when ownership officially transfers and you get paid. Be ready with:
- Keys, codes, and access credentials for the premises, systems, and online accounts.
- Signed transfer documents—bill of sale, assignment of contracts, lease assignment, etc.
- Final readings—utility meters, cash counts, and inventory lists. You may need to delay an inventory order that is scheduled post-closing unless Buyer wants to accept responsibility for paying the invoice.
- Transfer of point of sale and merchant processor systems – if your business uses credit cards and online ordering, you will need to coordinate with buyer in advance to ensure the systems are transitioned to remit sales and revenues to buyer’s accounts after closing.
7. Plan for Life After the Sale
- Restrictive covenants—check whether you have a non-compete or non-solicitation clause. Understand the terms so you avoid any future violations.
- Email and social media– if your personal and business emails are intertwined, you will need to transition your emails, log-in credentials and social media accounts to be ones not associated with your former business as buyer now owns those.
- Taxes—set aside funds for capital gains or other tax obligations. Work with your tax professional to file any tax reports, returns and removal of you as a responsible tax party from the business.
- Future involvement—some contracts require training or transition support for the buyer.
Final Thought: Stay Engaged Until the End
Selling your business isn’t a “sign and forget” process. The more you stay informed, meet deadlines, and communicate with your attorney and accountant, the smoother your closing will be—and the more confident you’ll feel about your next chapter.
Tracy Jong is a Senior Attorney at Evans Fox LLP with 30 years of experience focusing her practice in business law, intellectual property and licensing for alcohol and cannabis. Tracy Jong is a member of the New York Bar and is a registered attorney at the United States Patent and Trademark Office. She can be reached at [email protected].
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The content has been prepared for informational purposes only; it should not be construed as legal advice, does not create or constitute an attorney-client relationship, and readers should not act upon it without seeking professional counsel.