Letter of Intent Template for Acquiring a Business Coaching Practice

Buyer and Seller Identification

Identify the acquiring entity, the selling entity, and any individual sellers (typically the founder-coach) who will be party to the transaction. In coaching practice acquisitions, it is critical to name both the business entity and the individual founder as sellers, since client relationships and IP may be held personally rather than inside the company.

💡 Sellers who have operated as solopreneurs may have client contracts, email lists, trademarks, or domain names held personally rather than by the business entity. Confirm this during due diligence and ensure the LOI names the individual as a party so those assets are explicitly included in the transaction scope.

Transaction Structure

Define whether you are acquiring the equity of the coaching practice entity or its assets. Asset acquisitions are more common in smaller coaching deals and allow the buyer to select which assets and liabilities to assume. Equity acquisitions may be required when client contracts or government certifications are not easily assignable.

💡 Push for an asset deal if the coaching practice has any undisclosed liabilities or informal financial records — common in solopreneur operations. If client contracts are not assignable without client consent, address this explicitly and consider a consent solicitation process as a closing condition. Equity deals may be preferred when the practice holds SBA certification, niche credentials, or membership agreements that are entity-specific.

Purchase Price and Valuation Basis

State the proposed total purchase price, the valuation methodology used, and the breakdown between upfront cash at close and any deferred or contingent components such as earnouts or seller financing. Business coaching practices in the lower middle market typically trade at 2.5x–4.5x EBITDA, with placement in that range driven by recurring revenue quality, founder dependency risk, and IP defensibility.

💡 Sellers of coaching practices often anchor to revenue multiples rather than EBITDA multiples because their margins are high and they conflate personal draws with business earnings. Come prepared with a clear adjusted EBITDA calculation that adds back personal expenses, owner compensation above market rate for a replacement coach, and one-time items. For practices with significant founder dependency, argue for placement at the lower end of the multiple range (2.5x–3.0x) with upside available through earnout achievement.

Earnout Structure

Define the earnout mechanics, milestones, measurement period, and payment schedule. Earnouts are nearly universal in coaching practice acquisitions because client attrition post-close is the single largest value risk. Structure earnouts around client retention rates, recurring revenue continuity, and gross revenue thresholds over a 12–24 month period following close.

💡 Sellers will push for higher earnout totals and looser retention thresholds. Buyers should insist on defining 'retained client' as a client generating at least [X]% of their prior annual contract value, not merely a client who has not formally canceled. Also negotiate Seller's obligations during the earnout period — a transition consulting agreement requiring Seller to actively support client introductions is essential to making the earnout fair to both parties. Avoid earnouts longer than 24 months, as they create ongoing disputes and management friction.

Due Diligence Period and Access

Define the length of the due diligence period, the scope of information Buyer will receive, and the process for accessing clients, associate coaches, and key contractors. Coaching practice due diligence must include review of client contracts, IP documentation, financial records, and assessment of founder dependency — all of which require careful coordination to avoid tipping off clients prematurely.

💡 Sellers are understandably protective of client relationships during due diligence and will resist broad client access. Negotiate for a structured reference process where Seller introduces Buyer to a representative sample of clients in a controlled setting. Prioritize reviewing the top 5 client relationships by revenue, the IP ownership chain for all proprietary frameworks, and the associate coach agreements to assess delivery capacity without the founder.

Exclusivity and No-Shop Period

Request an exclusivity period during which Seller agrees not to solicit, entertain, or advance discussions with other potential buyers while Buyer completes due diligence and negotiates definitive agreements.

💡 Exclusivity is non-negotiable for serious buyers. Sellers of popular coaching practices with multiple interested parties may push back on length — 45 days is a reasonable compromise. If Seller resists exclusivity entirely, treat it as a red flag about their commitment to the process. Link the exclusivity period to your SBA lender's timeline if using SBA financing, as lender processing can extend timelines.

Transition and Consulting Agreement

Outline the seller's post-close transition obligations, including the duration of a consulting or employment arrangement, scope of client introduction and handover activities, and compensation structure. This section is among the most critical in a coaching practice LOI given the personal nature of client relationships.

💡 Sellers often underestimate how long client transitions take and will push for shorter consulting commitments. Insist on a minimum of 6 months with a renewable option. Tie at least a portion of transition consulting compensation to performance milestones — for example, completing introductory sessions with 100% of active retainer clients within 90 days of close. Non-solicitation and non-compete provisions should be negotiated carefully and cover geographic and vertical scope appropriate to the practice's client base.

Representations and Warranties Preview

Identify the key representations and warranties Buyer will require in the definitive agreement, with particular focus on the areas most material to a coaching practice acquisition: IP ownership, client contract status, financial accuracy, and absence of undisclosed liabilities.

💡 Sellers of service businesses frequently have informal financial records and will resist broad financial representations. Work with your accountant to recast financials during due diligence and then anchor representations to the recast statements. IP ownership representations are non-negotiable — if a seller cannot confirm that coaching frameworks, course materials, and branded content are owned by the business entity, require that these assets be formally assigned and documented before close.

Confidentiality and Non-Disclosure

Reference the existing NDA or establish confidentiality obligations within the LOI to protect both parties during the negotiation and due diligence process, including protection of client identities, financial information, and proprietary methodology details.

💡 If you have not executed a standalone NDA before LOI negotiation, include confidentiality directly in the LOI. Sellers of coaching practices are particularly sensitive about client identity disclosure — their clients are often executives or business owners who have not publicly disclosed that they use a coach. Respect this sensitivity and limit the circle of people who receive client-identified information during due diligence.

Governing Law and Binding Nature

Specify which provisions of the LOI are legally binding and which are expressions of intent, and identify the governing law jurisdiction. Most LOI provisions are non-binding statements of intent, but exclusivity, confidentiality, and governing law provisions should be explicitly binding.

💡 Be explicit about which sections are binding. Sellers have been known to claim that an LOI created a binding obligation to close — clarity here prevents future disputes. For SBA-financed deals, note that lender approval is a condition precedent to closing and cannot be waived by either party.