Buying a business


Submitting an Indication of Interest (IOI)


Dylan Gans

August 30, 2023 ⋅ 2 min read

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Submitting an Indication of Interest or IOI

If you’re in the market to buy a small business, you’re probably spending a lot of time thinking about how you might stand out from other qualified buyers. Businesses that meet your criteria might be hard to find, and when you do, it could feel like you’re competing with a lot of other folks who also think, for example, a cash-flowing business with limited owner involvement would be a good purchase! 

I’m here to give you a leg up early in the process of purchasing a small business: submit an Indication of Interest (IOI). An IOI is a non-binding letter that outlines things like price range, deal terms, how you plan to finance the acquisition, diligence, and post-sale involvement. 

An IOI will set you apart from the pack. Other buyers are likely spending a lot of time loosely discussing potential deal terms while working up to submitting an LOI. The harsh reality is that a lot of brokers (or owners) may decide to deprioritize your requests after a certain period. Submitting an IOI shows that you are professional and committed, and aren’t going to have 3 months of conversation just to submit a lowball offer. An IOI helps to align with the seller on price from the early days.

When do I submit an IOI?

There is no hard and fast rule. Many buyers choose to submit an IOI after accessing the data room but before their first conversation with an owner. Alternatively, we've found that submitting an IOI after the first or second conversation with the owner can be a sweet spot.

To whom do I submit an IOI?

You'll want to submit your IOI to the broker or owner of the business, whomever is managing the sale. If a broker is involved, sending the IOI to the broker first allows them to provide you with helpful feedback that may make the IOI more appealing to the owner. The broker can then take the IOI back to the owner, who will hopefully be motivated to move more quickly after seeing that you are really interested.

How do I write an IOI?

There are lots of resources online and there is no singular right way, but we've created a template to get you started. Happy hunting!


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