How to Write an Offer to Buy a Business


Updated March 6, 2019

By William Bruce, President, American Business Brokers Association.

Let’s say you have looked at several businesses for sale and narrowed it down to the one that you want to pursue.  You think you might want to make an offer to buy this business, but you’re not quite sure.  You have a little anxiety about the unknowns.

The Problem

The problem, bluntly stated, is that the seller of the business does not want every Tom, Dick and Harry going through his private books and records, some of which might be very sensitive for one reason or another.

Let me ask you at this point to stand in the seller’s shoes for a moment.  He has taken the big step of putting his business up for sale.  This may have been a tough emotional decision for him.  And he probably has the same heightened level of anxiety as you do about the future transaction.

Now his business is up for sale and before long, he’s got all sorts of strangers asking him to let them look through his most private records.

As a business broker, I can verify that this is a real problem.  Some people who look at businesses have no real intention of ever buying one.  They are what we call “tire kickers.”  They will look forever and never make a purchase.  Others may have a real interest, but when push comes to shove, they lack the financial capacity to make the purchase.  Still others may have the financial capacity, but are unwilling to pay the owner anywhere near an acceptable price for his business.  There have also been instances in which a competitor sent in a stranger to check out the business.  And all of these people will demand to paw through the seller’s private books and records.

Now you may step back into your own shoes.  The brief visit to the seller’s side of the desk, I hope, gives you an understanding of the problem.

The Solution

The solution is the contingent offer to purchase.

Simply stated, it works like this.  You, as the prospective buyer of the business, assume for the moment that the preliminary information furnished to you on the business is accurate.  You should by now have at least the annual revenue and cash flow of the business plus the other important numbers.

You then base the amount of your offer to purchase the business on those numbers, but with the following verbiage written into the contract as a condition of the offer:

This offer to purchase said business is contingent upon buyer’s inspection of all the books and records of the business and the buyer’s satisfaction with the information contained therein.

This verbiage in the contract fully protects you.  If you find, during your inspection of all the books and records, including the tax returns, that the numbers furnished you were not correct, then you have the perfect right to terminate the contract and walk away with no further responsibility.  Any earnest money deposit held in trust is promptly refunded.

This procedure also protects the seller, as he knows that you are now serious about the transaction.  You and the seller have come to an agreement on price and terms – possibly after some counter offers – and you have put up an earnest money deposit.  The seller should now regard you seriously, and accordingly will open up all of his books and records for you to inspect.  This inspection phase of the transaction, by the way, is referred to as due diligence and is covered in this article.

The contingent offer is actually a win-win situation for both parties.It assures the seller that the buyer is serious and it protects the buyer in case the information that has been furnished is not accurate.

Now, if marriage was just as simple….

The Other Contingencies

There are other contingencies that you also might want to include in the contract.  For example, if you are borrowing the money with which to purchase the business, you would need to include the following language to protect yourself if you don’t already have the loan approved:

This offer is contingent upon the buyer obtaining satisfactory financing for the purchase of the business.

And if the business operates from leased premises, you would want to include the following proviso:

This offer is contingent upon the buyer’s assumption of the existing lease for the business premises or otherwise negotiating an acceptable lease with the landlord for said premises.

Other items that should be included in the purchase contract

  • The Closing Date and Place. Pick a closing date that will give you enough time to inspect the books and records of the business, get your loan approved and take care of any other issues.
  • Inventory Level. If the business carries inventory for resale, this is where you agree on the amount of inventory that must be on hand on the date of closing.  This should be the amount of inventory normally carried by the business in the normal course of doing business.  Your broker should have this figure.  The purpose of this provision is to prevent an unscrupulous seller, between the date of agreement and the date of closing, from selling out the inventory and leaving the buyer with empty shelves.  You and the seller jointly take inventory on the day of closing.  If the inventory level, at cost, is below the figure specified in this paragraph, the purchase price of the business goes down by the amount of the shortage.  Conversely, if the inventory is over the specified level, the price of the business is adjusted upward by the amount of the surplus.  This is fair to both parties, and if the inventory discrepancy is small, the difference is usually waived, as both parties understand that it is impossible to quote an exact inventory figure in advance for any given day.  But the provision is there for protection if it needs to be invoked.
  • Training. You and the seller need to agree on the number of days training you think you will need from the seller.  Normally, this ranges anywhere from one to two months.
  • Non-Compete Agreement. You don’t want to buy Ms. Jones’s gift shop and then next month see Ms. Jones open a competing shop right down the block.  This provision prevents that possibility.  You simply agree on the distance and time limitation in this paragraph of the contract.
  • Removal of Contingencies. Remember all of the discussion above of the contingencies: inspection of the books, the lease and loan approval.  At some point, these contingencies are satisfied or waived by the buyer.  This part of the contract is where you decide how much time you’re going to need to accomplish any work needed to satisfy yourself as to these contingencies. Ten to 15 days prior to the closing date is customary.  After satisfaction of the contingencies, the contract then becomes binding on both parties, and the closing documents can be prepared.
  • Offer Deadline. This provision gives the seller a deadline for response (acceptance or counter-offer) to your offer.  If there is no response from the seller by this date and time, your offer is legally null and void and you have no further liability.  Two or three days are long enough here, unless there are unusual circumstances.

Readers can request by email a copy of William Bruce’s 67-page booklet, “How to Buy a Business in a Safe and Organized Way.”  The booklet contains a sample of an Offer to Purchase Agreement.  The email address is

Now, take a deep breath.  It’s really not as complicated as most folks seem to think.  And we’re just getting to the fun part – the negotiations, which is covered in a separate article.

#    #    #

William Bruce is a business broker, an Accredited Business Intermediary (ABI) and a business appraiser assisting buyers and sellers of privately held businesses in the transfer of ownership.  He currently serves as president of the American Business Brokers Association.
He is available nationally to advise on issues involved the sale or purchase of a privately held business.  He may be reached at (251) 990-5934 or by email at
 His article on how to analyze a business that you may be interested in buying can be read by clicking here.
(C) Copyright William Bruce.  All rights reserved.

If you found this information helpful, share it using the links below.

About William Bruce

President, American Business Brokers Association / Business Broker and Accredited Business Intermediary assisting business buyers and sellers with the transfer of ownership since 1986 / Author: How to Buy a Business.
This entry was posted in Business Valuation & Appraisal, Buying or Selling a Business and tagged , , , , , , . Bookmark the permalink.

151 Responses to How to Write an Offer to Buy a Business

  1. Bryan Makoka says:

    Good Day

    Are you currently aware of any website where I can get a perfect free sample of an offer to purchase agreement?

    Interested in buying a flying school through investor funding.


    Bryan Makoka
    South Africa

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  5. Shelmar says:

    Hello Bill,

    Is it possible to obtain a copy of the 67 page booklet of how to buy a business? My email is

    Thank you for the valuable information.


  6. Carlos Araujo says:

    Dear William,
    Would it be possible for you to send me the 67p booklet please? my email is:

  7. Tom Tanner says:

    I too would like to get a copy if possible. Thanks for the useful info.

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  9. Eugene says:


    Is it possible to get you booklet?
    Best regards,

  10. Ryan Haylock says:

    Hi William,

    Can you send me the 67 page booklet of how to buy a business ?

  11. Renier Smit says:

    Hi William, will you please be so kind and forward me a copy too
    regards (from South Africa)

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  13. Ioanna says:

    Hi william

    I would like to have the 67page booklet of how to buy a business and in my case is just a small business which has not been making any profit as the saling products are not interesting but i want to take over as i have a good idea of making it something different.
    The trouble is that the store is in a residential area and they ask for a high premium.
    I would like to impress them and make the deal!!
    Thank you

  14. Ted Fireman says:

    Thanks for sharing excellent information. Not intending to distract from your very informative article and well written blog but I wanted to mention that one of the other business ownership options, franchise ownership, allows for a very thorough research process.

    Franchisors are required by the Federal Trade Commission to produce a Franchise Disclosure Document (FDD) each year. This document provides a wealth of information on all aspects of the business — too lengthy to describe here. The FDD includes contact information for current and past owners. Prospective owners can call as many as they choose to learn about the business, earnings, the training and support of the franchisor, and the role of a successful franchise owner. The franchise owners in different markets have no reason to withhold important information. This process empowers prospective owners to make knowledge based decisions that meet their own needs.

  15. Zein Moh says:

    Hi William

    I would like to have the 67page booklet of how to buy a business and in my case is just a small business with no profit currently, I would get the offer document.


  16. Matt Bentley says:

    Bruce- If it’s not too late I’d love to read your book too. Thanks for your consideration

  17. Ritchie says:

    Hi William,

    Can you send me the 67 page booklet of how to buy a business ?
    Thanks for your consideration.

  18. Matthew says:

    Hi bruce,
    I’am currently in the process of purchasing a small hvac company. Can you send me a copy of your book or any other info that can help me in this process? Thank you

  19. Jerry says:

    Hello Ryan, my name is Jerry .I have worked as an accountant for ten years and want go into full time consulting but will be adding business brokerage as a key part of my business .I will be grateful if you could assist me with regular information in this field to enable me succeed . I must say that reading your write ups on this field has helped to boost my interest further.

  20. Susanna says:

    Hi Bruce,

    I’m in the process of purchasing a small school and would appreciate receiving the booklet that you mentioned in this article. Your article alludes to a down payment with the offer letter. Typically how much should be the amount of downpayment–is it based on the purchase price that you are offering? In liue of a downpayment can I get a letter from my bank verifiying that I have to funds to purchase the business that I’m offering?

    • Susanna, thanks for dropping by. I’ve emailed you the booklet. The amount of down payment is highly variable. In seller financed business transfers, typical down payments range from 30 to 50 percent. If you can finance the acquisition with your own arrangements through your bank, you’ll be in a stronger negotiating position on price. Good luck with the venture.

  21. Ellie says:

    Would it be possible to receive a booklet as well?
    Thank you in Advance

  22. Alex says:

    Hi William,

    Thank you very much for writing the article, its very informative. I would love to receive the booklet as well.


  23. anne says:

    How do you suggest I proceed if I want to buy an existing business that’s currently NOT for sale? Should I have a business attorney approach the business? I’m very interested in buying this business but it’s currently owned by an Indian couple who speaks very little English.

    • Ann, you might have someone you trust who can translate go with you to talk to them. Just let them know in the beginning that you take the issue of confidentiality very seriously. They will be concerned about that. If the situation progresses, be sure to VERIFY EVERYTHING that is represented to you by the seller.

  24. Mark Devenney says:

    Hi William
    My business is advisory and mentorship to black entrepreneurs in South Africa .
    At times this involves getting them involved in the process of purchasing shares in businesses or complete businesses.
    It seems that your booklet could add great value to their knowledge base. Would it be possible for you to send us a copy

    Kind regards

    Mark Devenney

  25. Janjua says:

    Hello William,
    Thanks for sharing the knowledge and wisdom re business world.
    Please e-mail me a copy of the booklet including template of a purchase offer agreement.

  26. Amelia says:

    I would love to receive the booklet as well:) !
    Many thanks,

  27. Nick Beery says:

    Myr. Bruce, your articles have been very helpful in our research on buying our own business. May I have a copy of your booklet? My wife and I are very grateful, thank you.


  28. Cristina Ungureanu says:

    Hello Bruce,

    Would it be possible to receive your booklet?

    Thank you,


  29. R.D. says:

    Very informative article. I would love to receive the booklet as well.
    Thank you very much.

  30. Justin says:

    Hi William, please email me the booklet.


  31. Hello William.

    May I have a copy of the 67 page how to booklet?

    Thank you,

  32. Michele Simpson says:

    Gidday William,
    Would it be possible to have a copy of the 67 page booklet too please?

  33. Jack Wolfe says:

    HI William

    Could I please receive a copy of your 67 page booklet?



  34. Jennifer Nelson says:

    Hello, would you please be able to send me a copy of your booklet? Thanks so much!

  35. Hi William,
    I think this would help me tremendously please send me a copy.

  36. sia says:

    Hello William, I would also love a copy of your book.. 🙂
    Many thanks

  37. Hi William, this is a great article. I would love to receive the booklet if possible – it looks like it is in huge demand!!

    Kind regards

  38. Arisa says:

    Thank you for the informative article William. I’d like a copy of the booklet please!

  39. Claudio says:

    Hi William, thank you for your insight, very informative and provides me with a different perspective on how to approach a seller. William could I kindly ask for you to email me your 67 page booklet as well. Thank you.


  40. Dwayne Ball says:

    Hello Sir William Bruce!

    Please could you email me a copy?☺☺

    Many thanks in advance

  41. Greg Brown says:

    Hi William,
    I would love a copy of your booklet also please

    Thank you in advance


  42. Alex Moreno says:


    Could you email your booklet:

    Moreno . alex @ gmail . com


  43. Hi Bruce
    Would you mind sending me the book as well?
    Thank you in Advance

    Best Regards


  44. zakijauhari says:

    Hi William,
    I would love to give your booklet a read since I am acquiring a business soon.

    Thank you so much for keeping us informed.

    Kind regards,
    Zaki Jauhari

  45. Stephen Allmer says:

    Hello William,
    Would it be possible to receive your booklet on how to buy a business?
    Thank you.

  46. HI Will,
    I know it’s minor but I have to say to everyone – please stop calling him Bruce! Mr. Bruce, William, Will (don’t think he responds to Bill from signatures on here). There, I feel better now, haha.
    Mr. Bruce – may I have a copy of your book? If so, my best email is:

    and thank you for this amazing tool.

  47. Egole says:

    Timely information Bruce.

    I’m currently trying to make an offer for a business I’m considering. As a first time buyer, I don’t know how to proceed with this. Please send me your booklet. Thanks.

  48. Dan says:

    Hello Mr. Bruce

    Is a booklet still available? I would love to see it. Buying a new business.


  49. Hemanth Kumar says:

    Hi bruce,
    I’am currently in the process of purchasing a franchisee. Can you send me a copy of your book or any other info that can help me in this process? Thank you

    • Hemanth:

      Thanks for visiting. The booklet is on the way.

      Best wishes,


    • Hemanth:

      I suggest you work with a professional to go through a structured process to find a well-vetted franchise that matches your goals and budget. This gives you the best chance to succeed. With 3000+ franchises, it is difficult to know how to find a great match and there are many franchises that should be avoided. The professional consultant process enables you to secure the information you need to make smart, knowledge-based decisions that meet your needs. Call or email me and I can suggest a knowledgeable professional.

  50. pdriscoll says:

    Great articles on the acquisition process. We are considering acquiring a business and have found your insights very helpful.
    Could I please receive a copy of your 67 page booklet?

    Thank you,

  51. Ken Minicuci says:

    Hello Mr. Bruce,
    I’m currently trying to make an offer for a business I’m considering. As a first time buyer, I don’t know how to proceed with this. I think the next step is to create a proposal to purchase.

    Please send me your 67 page booklet, as it sounds very helpful.



  52. Rich Ledger says:

    Can you send a copy of the booklet to
    Thanks, Rich

  53. Terry Jordan says:

    Hi William,
    Can you send me a copy of your 67 page booklet please.
    Thanks in advance, Terry

  54. Mike says:

    Hello William,
    Can you please send me a copy of your 67page booklet. Thank You!

  55. Grant Stewart says:

    I would love to receive a copy of your 67 page booklet.
    thank you very much.;

  56. Alex Higgins says:

    Hi William.

    Please can you forward it onto me as well.

    Many thanks,


  57. Mike Dill says:

    Hello William,

    Very nicely written article. Thanks for sharing your expertise. I would like a copy of your booklet as well.


  58. Hello Bruce, can I please have a copy of the booklet also?

  59. Russell Hunter says:

    Hi Bruce. Wondering if I’m able to get the booklet also thanks? Thanks for your assistance!

  60. Vernita Peebles says:

    Please send me a copy of your 67pg booklet. What states do you service?

    Thank you

  61. Hi William,

    Great read. Would you be able to forward me a copy of the booklet also?
    My email is

    Thank you kindly,

  62. Esme Rose Hall says:

    Hello, I would love to have one copy too, , thank you very much!

  63. C says:

    Hello William,
    I would like to have a copy of your book. Please send to

  64. David Mills says:

    Do you ever represent buyers in the process or strictly sellers? Is it even an option?

  65. K. Steiner says:

    Hello William,

    Thank you for the very informative article. I’m considering buying a business. Can you please send me your booklet?

    K. Steiner

  66. jeromy hanes says:

    please send copy of the booklet to me. Thank you in advance.

  67. Dmitriy Ivanov says:

    I found your article, read through it and would like to request a copy of booklet. Thank you.

  68. OW says:

    Great article. Would like to request a copy of your booklet. Thank you!

  69. Tyrone Eugene says:

    Mr. Bruce, I would like receive a copy of your booklet. My email is

  70. Yeon L says:

    Your article was very helpful, and I would love a copy of the booklet. Thank you in advance!

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