How to choose the right buyer and close the sale
So you’ve prepared your space, the DenSwap team has helped you create a listing, and offers are coming in. What happens next? What does the actual process of transferring your coworking space to someone else, getting the money, and staying legally protected look like? We’ve done this before (even for our own spaces) and are here to help you go through the process with confidence. Here’s what you can expect.
Communicating with buyers and trading documents
As buyers approach you, they’ll send messages through DenSwap’s communication system, which you can find in your dashboard. The communication system tracks the conversations you have with different potential buyers in one place, along with the current offers and associated documents.
The built-in document vault keeps a paper trail for all NDAs, LOIs, contracts, and due diligence paperwork. It’s incredibly important that you keep all official communication and documentation regarding the sale of the business on the communication system where it can be securely stored and verified in case of a legal dispute down the road. Although you’ll have in-person and phone contact with your buyers, make sure everything is in writing and securely stored.
Buyers usually ask for more information on three things: your financials, your lease terms, and your experience running the business and operations. It’s up to you to decide whether or not to use a non-disclosure agreement (NDA) before disclosing financials and other sensitive information about your business. It adds an extra step of paperwork and NDAs are difficult to legally enforce, but they do offer an additional layer of protection from bad-faith buyers who are looking for more information on your financials.
Most buyers will want a walkthrough of your space – this is effectively an interview and opportunity for them to ask questions and leave with a strong sense of how your business operates. After the space walkthrough, you should expect and ask for a Letter of Intent and the due diligence phase shortly thereafter.
Download a sample non-disclosure agreement used to protect disclosures during buyer communications.Open the sample non-disclosure agreement
Selecting a buyer and receiving a Letter of Intent (LOI)
DenSwap has examples of Letter of Intent and these important documents should be passed through our document portal before entering the due diligence phase. In due diligence, documents and financials are closely examined in preparation for an official sale. If you follow the DenSwap document checklist then you should be well prepared. DenSwap’s free escrow service should then be used to securely process money once all obligations have been satisfied by both sides.
Download a sample Letter of Intent so you know what to expect from potential buyers.Open the sample letter of intent
Secure your business with DenSwap’s escrow
After the due diligence phase is over and a contract to purchase the space has been signed, the purchase price outlined in the contract is entered into DenSwap’s escrow service until the handover is completed. The escrow process verifies the identity of everyone involved to make sure everything is above board, then handles the transfer of funds. We use a licensed third-party to handle the transaction, and the service is included for free as part of DenSwap’s service – no need to pay a 1-3% escrow percentage.
Transitioning the space to the new owner
Once both parties are verified and money is deposited in escrow, it’s time to transfer the business. It’s also time to tell the staff and share the new owner’s story and introduce them to the community. This is an exciting time for everyone. Usually, a special event is held where the owner is introduced and the community can ask questions and the former owner can be thanked and celebrate what they help build. It’s a great opportunity for members to have input on any new changes and for everyone to create a connection.
It’s also time to transfer the assets of the business over and most spaces include intellectual property like the website, logo, and software as well as any physical property like furniture and IT equipment. The physical items are easy to understand, but the new owner needs to make sure that they get all of intellectual property that runs the businesses.
Intellectual property includes:
- Website and domain transfer
- Membership payment information and coworking software
- Logo and branding rights
- Social media profiles
- Training manuals
- Advertising and marketing history
- Email lists and CRM records
- Staff payroll documents
Build the perfect deal.
It’s time to pull the trigger – create a listing on DenSwap and we’ll help you and your community be matched with the right buyer that shares your vision. We’re committed to a straightforward selling process that works with you to find the next stage of your company.