Selling Your Business? Get Your Buyer's Attention

One of the first steps to marketing your business for sale is creating a selling memo. Here's what to include that will pay big dividends down the line.

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Whether you're selling your business on your own or through a broker, you'll need to be ready to present a thorough written overview of your business and why it's a good purchase prospect.

Some brokers call this document a selling memo. Others call it a confidential description book or an offering memo.

If your business is very small, uncomplicated, and likely to sell for under $200,000, you can probably reduce the selling memo to a terms sheet that presents little more than a business description, financial information, and presentation of price and terms.
If your business is large, and if its assets, products and systems are complicated, your selling memo will likely run considerably longer in order to adequately explain your offering and its higher price.

A few quick exercises can help you develop the right content for a complete selling memo, along with advice for how to distribute the information to prospective buyers and why and how to obtain confidentiality agreements beforehand.

Step 1. Prepare your selling memo.

Your selling memo is the first comprehensive description of your business that your prospective buyer will see. It needs to strike a careful balance between delivering facts about your business while also offering an inspiring description of its future potential.

It presents facts about what your business is and does and what makes it an attractive purchase opportunity without revealing sensitive information that you or your ultimate buyer won't want non-buyers (especially competitors) to know.
It doesn't stretch the truth or overlook weaknesses, as you'll need to warrant the accuracy of all information you've provided before a sale closes.
It shows earnings and asking price information without disclosing complete financial statements.
It inspires buyers to take the next step by contacting you for more information.

Mike Handelsman is group general manager for BizBuySell.com and BizQuest.com, the Internet's largest and most heavily trafficked business-for-sale marketplaces. @BizBuySell