Selling Your Business: The Need for Documentary Evidence
You've done the hard work and built up a business - now you're thinking
of selling it. You only get to sell your business once; and a well-prepared
sales document can make all the difference.
Often referred to as an information or sales memorandum, it's designed
to do just as it suggests: sell your business. In essence, you need
to view your sales document as a business plan, but in reverse. Preparing
it can be one of the most time-consuming parts of the sales process,
but this document is often the only way for a potential purchaser to
judge whether to proceed to the negotiation stage.
Yvonne McDougall, director of corporate finance at Deloitte & Touche,
offers advice: 'You need to highlight salient points and cut out the
waffle - it saves a lot of time. Outline the unique selling point of
the company product or service, and include information on the quality
of management, company track-record, financial history, markets, customers
and suppliers. Outlining future prospects is also a good idea.' The
content of your sales document will depend on whether you are considering
a trade sale (approaching a business of a similar nature) or a sale
to institutional investors (such as private equity providers), with
or without management involvement. With a trade sale, it's not necessary......
The remainder of this article can be read on our subscribers
section
Other topics covered in this article
Sales Document - what to include
How to prepare for due diligence
Advice from Industry experts
Common mistakes
