Step-by-Step Guide: Creating Your First LOI in 30 Minutes

Drafting your first Letter of Intent (LOI) for a business acquisition can feel overwhelming. With hundreds of deals under our belt, we've developed a streamlined process that helps buyers create comprehensive, professional LOIs in just 30 minutes.

This guide walks you through each step, from initial preparation to final review, with links to our interactive tools that automate the complex parts.

Before You Start: Essential Preparation (5 Minutes)

Gather Key Information

Before opening any templates or tools, collect these critical pieces of information:

About the Target Business: Legal business name and structure, annual revenue and EBITDA, number of employees, key assets included in sale, known liabilities or concerns.

Your Acquisition Parameters: Maximum purchase price range, available cash for down payment, financing requirements, desired closing timeline, post-acquisition plans.

Having this information ready will streamline the entire LOI creation process. If you're unsure about your readiness, take our Buyer Readiness Assessment to identify any gaps.

Step 1: Determine Your Offer Price (5 Minutes)

The purchase price is the heart of your LOI. Don't guess—use data to support your offer. Start with our Business Valuation Calculator to determine an appropriate offer range.

Most small businesses sell for 2-4x EBITDA, while larger businesses may command 4-6x or higher. Our calculator automatically applies industry-standard multiples.

Step 2: Choose Your Deal Structure (3 Minutes)

The structure of your acquisition has massive tax and liability implications. Our Deal Structure Optimizer at /tools/structure-optimizer helps you compare the tax impact of different structures.

Step 3: Draft Your LOI Using Our Generator (10 Minutes)

Now comes the actual drafting. Our LOI Generator Tool at /tools/loi-generator transforms your inputs into a professional letter of intent.

Step 4: Include Strategic Provisions (5 Minutes)

Clearly delineate which provisions are binding (exclusivity, confidentiality) versus non-binding (purchase price, payment terms). Set clear expectations with specific dates using our Timeline Tracker.

Step 5: Review and Refine (5 Minutes)

Before sending your LOI, use our Negotiation Analyzer to evaluate your position and prepare for likely counterpoints.

Your 30-Minute LOI Timeline

Minutes 0-5: Gather information and documents. Minutes 5-10: Calculate valuation and determine price. Minutes 10-13: Choose deal structure. Minutes 13-23: Generate LOI with our tool. Minutes 23-28: Add strategic provisions. Minutes 28-30: Final review and send.

Ready to make an offer on a business? Our LOI Generator walks you through each section with helpful prompts and examples. In just 30 minutes, you'll have a professional letter of intent ready to send.