Get buyer attention
ANY prospective buyer looking seriously at buying your commercial business will want to know all of the vital information that makes your business so successful.
Buyers will also want details about the features that make your business unique, what sets you apart from your competition?
Smart sellers are turning to selling memorandums to assist in the sale of their businesses.
Selling memorandums contain all of the relevant information about the business and are provided to prospective buyers or potential successors during preliminary sale discussions. They assist any prospective buyer to make an informed decision about purchasing your business.
To achieve the sale of your business, it will be essential for you to provide any prospective buyers with access to the most accurate and up-to-date information about your business.
However, before handing over a selling memorandum, make a note to prepare a confidentiality agreement and have this signed by all prospective buyers, possible successors or any agents, in advance of providing confidential details about your business, assets and trading figures.
Why is a selling memorandum important?
- If buyers have a high degree of confidence in the accuracy of the information provided to them, this will be reflected not only in the sale price, but in the entire sale process;
- It is a simple tool, used to clearly demonstrate the uniqueness of your business;
- It contains relevant sale information which will assist in sale discussions, and
- It will substantially increase your opportunities for a successful sale completion.
What is included in a selling memorandum?
Some of the information to be included in your selling memorandum includes:
- The products or services you provide;
- The history of your business;
- Details of your clients;
- Details of employees and employee agreements;
- Details of business achievements;
- Company policy documents;
- Business alliance agreements;
- Details of your unique selling points;
- Financial information;
- Business plan;
- Marketing plan;
- Licences and accreditations, and
Register of information available for the prospective buyers' due diligence - including financial information and documentation.
One of the key inclusions in your selling memorandum will be your unique selling points (USPs). Your USPs are the features that distinguish and make your business stand out from your competitors.
Some examples of USPs could be:
- Your high value client base;
- Your business specialisation;
- Your business culture;
- Your net fees as a percentage of total income, and
- Your level of sustainable income.
Sellers should only include accurate information and it is important to confirm the accuracy of your information with your accountant or financial advisor.
Thinking of selling? Ulton can prepare all of the financial information and relevant documents that make up a selling memorandum unique to your business. We will then be able to confirm the details of your business' value, its trading position and any forward cash flow projections with any prospective buyers - making the task of selling your business easier.
Ulton assists regional business owners in the often complex negotiations required to achieve the successful sales of their business interests.
Jason Krenske CA is a Partner with Ulton - chartered accountants, business advisers, stockbrokers and financial planners. This advice is general and readers should seek their own expert advice before making decisions.