How I Help: Selling a Business and the Letter of Intent
In a business sale the letter of intent (LOI) is a non-binding first step to start negotiations. It includes things like price, payment terms and other key terms of the deal.
But just because it’s non-binding, doesn’t mean it’s not important. It’s probably the most important legal document of the whole deal, because it’s a psychological anchor for the rest of the process. Any major changes introduced after that could kill the deal.
When my client Heather was selling her medical supply business, she worked on the LOI herself at first, but then brought me in when she realized how complex it was. I was able to get her much more favorable payment and price adjustment terms. I also added several provisions that she would not even have known to ask for. After that, the final contract was much easier to negotiate.
If you just received a formal offer to buy your company, consider: how many businesses have you sold? This is not the time to go it alone.