When you’re selling your business, the information or sales memorandum drives your sale process. It is key to motivating a buyer to the next stage – conducting due diligence on your business. While presenting your business in the best light, it must be grounded, easy to read, and concise. What does the business offer? Why are you selling?

What would you want to know in the buyer’s position?

What are you comfortable revealing? There is no commitment to buy at this stage and it is important not to put sensitive information into the public sphere.

Consider a weeding out process so you don’t have too many copies of the memorandum in the marketplace. Ask prospective buyers to sign a non-disclosure agreement before you make the memorandum available. Flag this in your early discussions.

Be conscious that a carelessly worded email may come back to bite you. Check everything thoroughly before you hit send.

How do you want to lead from the sale memorandum to due diligence? You could suggest a letter of intent before your prospective buyer proceeds into due diligence or while waiting for a formal agreement to be drawn up. This states the general intention of both parties and agrees key terms. It may identify deal breakers and transitional provisions. It can be long and detailed or short and basic and can involve considerable negotiation. Have your legal advisor on board for this.

Thinking about selling? We can help you with the sale memorandum and presenting a winning business.