Selling Your Business: Devising an Effective Offering Memorandum

While the majority of startups are anywhere from five to ten years old when they’re acquired, about 15 percent are only three to five years old and 10 percent only two to three years old when acquired.

If you’re an enterprising business owner who’s put in the hours and the money and are now finally looking to part ways with your business, there are several effective strategies that can give you a competitive advantage. The all-important offering memorandum makes the top of that list. The offering memorandum, or the selling memorandum, is one of the most straightforward, yet effective strategy you can use to obtain the best possible selling price.

Here’s how you should go about devising one.

Writing up the Executive Summary

While the offering memorandum is primarily factual, some marketing finesse can be applied to the executive summary portion of the document for business promotion. If there’s anything that’ll help potential buyers understand and convince them that buying your business is a savvy decision, then why not use it to your advantage?

Use the executive summary to detail the critical highlights of your organization. Outline several of your key factors, including an outline of the ownership and management structure, a short description of the company and financial highlights, and a general review of the products and services provided by your company. Include additional points such as essential market information, would-be variables, and why you’re selling your business.

A coherent, well-structured, and compelling executive summary will help motivate potential buyers to learn more about the benefits of acquiring your company.

Other Important Elements You Should Include

These are some of the other crucial elements you should include in your offering memorandum.

• Distribution information.
• Company’s clients or customers.
• Business competition.
• Management overview.
• Growth strategies.
• Competitive advantages your business has.

It’s critical that you don’t overlook any of this information because it’s very likely that prospective investors and buyers will skip to these sections before they review anything else. Finally, make sure to provide a well-written, satisfactory conclusion that ties everything together neatly. The more professional and polished your offering memorandum, the better your chances of selling your business.

The easiest way to get the most out of your offering memorandum and ensure its quality is to work with a veteran mergers and acquisitions professional. An M&A advisor will expertly guide you on what and what not to include in your offering memorandum.

As a seasoned M&A advisory firm, we’re committed to helping you get the best possible deal when selling your business. We’ve helped hundreds of clients buy and sell their businesses throughout the US. Our team of experts will conduct an accurate and thorough business valuation. Depending on your needs, we will market your company regionally, nationally, or globally.

Get in touch with us for more information or call us at 1-704-892-5151.