Selling Your Business? Get Your Buyer's Attention

Table of Contents if memo is longer than 4-5 pages.

Summary if memo is longer than 10 pages. (See Step 2.)

Business Description

• Summary of business history.
• Business structure (sole proprietorship, partnership, corporation) and ownership.
• Short description of products, staffing, markets and operations.
• Financial information including annual sales and earnings; description of products/services; description of key strengths; reason for sale.

Location

• Geographic location, building description, lease information.

Business Strengths

• List of business strengths and competitive advantages.
• List of business challenges accompanied by statements of how the issue could be overcome or provide a growth opportunity.

Competitive Overview

• Description of number of competitors without listing names.
• Description of competitive position and advantages of your business.

Products/Services

• Brief description of business offerings including product list.
• Description of distinguishing product/service features.
• Product sales trends.

Operations

• Information on operating hours and seasonality.
• List of operating equipment.
• Inventory information and list.
• Production processes.
• Staffing overview.

Marketing

• Industry information and growth trends.
• Geographic information and growth trends.
• Customer profile including information on client lists.
• Description of competition and competitive rank.
• Description of marketing approach, marketing plan and untapped marketing opportunities.

Key Management and Employees

• Key employee job titles, job descriptions, length of employment, compensation, benefits and credentials (but not names) including information on contracts.

Future Plans/Growth Projections

• List growth opportunities, along with the investment in time, financial resources and staff required.

Potential Buyer Concerns

• Issues, if any, that buyers might see as purchase barriers.
• Statements describing business, marketing, or transition plans that ease or overcome each potential concern.

Financial Information

• Statement of accounting method: Accrual or cash basis.
• Revenues, net income, and seller's discretionary earnings for past three years presented not as financial statements but as one-line summaries.

Offering Price and Terms

• Asking price (example: ABC Company, a California Subchapter S Corporation with all shares held by the owner. Asking price is $XXX.XXX).
• Contents of sale (example: Sale includes assets. Furnishings, fixtures, and equipment have a fair market value of $XXX,XXX, detailed in the Appendix. Inventory to be included at cost).
• Terms, including whether seller-financing is available (example: Seller requires $XXX,XXX at closing and the balanced financed by SBA note or seller-financing to qualified buyer at X percent over X years).
• Buyer qualifications, if any.
• Seller's time frame including sale timeline and seller's willingness to remain during a transition period.
• Statement of seller's willingness to sign a non-compete agreement.

Appendix

• Statement of seller's discretionary earnings.
• Financial statements as recommended by broker and accountant.
• Asset list showing values.
• Seller's disclosure statement, prepared with assistance from broker or attorney, providing an accurate assessment of business condition, a list of licenses and regulations that apply, and descriptions of any legal issues.
• Market area information if business relies on local clientele.
• Photos of business location, building and equipment.
• Copies of marketing materials.