The buyer and seller may consider entering into a letter of intent some time after they sign a confidentiality agreement but before they sign a business purchase agreement. When the parties reach this point they can go ahead and sign a letter of intent or they can immediately start negotiating the business sale agreement.
Typically the parties will choose to sign a non-binding letter of intent if: they don’t want to take their chances that one of the parties will change the basic terms; they want to exclusively negotiate a deal; or they want to create a moral obligation to negotiate a deal in good faith. The letter of intent should be non-binding. Otherwise it makes sense to just negotiate the final business sale agreement.
Be careful in how you word the letter. Otherwise you might end up with a binding agreement when you didn’t intend to have one. The letter can include things such as price, a list of assets to be purchased, how to handle liabilities, whether the parties will exclusively negotiate with each other, negotiation schedules, further investigations, and whatever else the parties want to include so long as you don’t include too many details to make it a binding agreement.