One of the key documents for marketing your business for sale is your Selling Memorandum or Confidential Business Profile. Your Selling Memorandum is a well organized, detailed and comprehensive book that should contain enough information to rouse interest, answer questions and help a prospective Buyer see your businesses strengths and its greater opportunity. This valuable information is only shared with serious prospects after they have signed a confidentiality agreement.
MAKING A GOOD FIRST IMPRESSION
As buyers are likely looking at multiple business opportunities, it is imperative that you make the best possible first impression. If done correctly, your selling memorandum can essentially “pre-sell” your business.
These are the following guidelines to keep forefront as you prepare your Selling Memorandum:
o Aesthetics – Your document should be well organized, have an appealing presentation and showcase your business
o Content – Make sure it’s professionally written, but avoid unnecessary jargon unless it’s technical terminology specific to your industry
o Be honest and accurate with all information – You want to showcase the top qualities of your business, but it must be verifiable data as well
o Data not to include – Do not include sensitive insider information including customer names, trade secrets or confidential pricing information
o Let the information speak for itself – Do not include hard sell language
PULLING IT ALL TOGETHER
The length, content and intricacy of each Selling Memorandum will vary based on the size and nature of the business, complexity of the industry and the type of buyer being sought.
The prospect of creating a Selling Memorandum can seem overwhelming and Sellers often prefer to have a business broker or other professionals assist with the preparation and production of their selling book and manage confidentiality. Either option you choose, you need to understand that serious buyers in today’s market are looking for direct and concise information in order to make a determination on where to invest their efforts.
Typically, the Selling Memorandum should include the following sections:
o Table of Contents
o Summary
o Business Description
o Location
o Operations
o Products and/or Services
o Market
o Financial Information
o Offering Price and Terms
o Appendix/Exhibits
