Crafting an Effective Selling Memo

A comprehensive written overview of your business is essential for any potential sale.  The selling memo acts as the introduction of your business to potential buyers, shaping their perception from the outset.  It provides factual insights about your business while safeguarding sensitive information that could compromise your position in the market.  Presentation is key.  A well-designed memo conveys professionalism. It shows that you’ve put effort into crafting your message.

A visually appealing presentation helps to convey your message clearly. When information is organized, easy to read, and aesthetically pleasing, it captures the attention of your audience and can keep the reader engaged throughout.  When information is presented in a visually compelling manner, it’s more likely to stick in the minds of your audience, increasing the chances of them taking action based on your memo.

The memo should cover various facets of your business, such as business description, location, valuable assets, strengths, competitive overview, products and services, operations, marketing, key management, future plans, buyer concerns, financial information, offering price, and terms.  But navigating the delicate balance of sharing pertinent information with potential buyers requires a strategic approach.

Exercise discretion in sharing the full selling memo or summary, reserving it for qualified prospects who have signed a confidentiality agreement.  Protecting sensitive information is paramount in the selling process.  Ensure you have confidentiality agreements readily available for potential buyers before sharing sensitive details.  Seek guidance from your broker or attorney on the proper procedures for screening and qualifying buyers, using standardized forms to streamline the process.

Responding to inquiries with the selling memo summary enables you to gauge buyer interest and financial viability before divulging further details. Respond to inquiries promptly. This demonstrates your commitment and professionalism. Aim to reply within 24 to 48 hours, or sooner if possible.

Provide clear and concise answers to inquiries. Make sure your responses address the specific questions asked and avoid unnecessary jargon or technical language that could confuse the recipient. Maintain a professional tone and demeanor in all your communications. Even if the inquiry is informal or casual in nature, it’s important to uphold a level of professionalism that reflects positively on your business.

Be honest and transparent in your responses. If there are limitations or drawbacks to your offering, don’t try to hide them. Instead, address them openly and offer solutions or alternatives where possible. Tailor your responses to the individual or organization making the inquiry. Acknowledge any specific concerns or interests they’ve expressed in their message and demonstrate that you’ve taken the time to understand their needs.

Provide any additional information or resources that may be helpful in addressing the inquiry. This could include product specifications, pricing details, case studies, testimonials, or any other relevant non-proprietary information.

Keep a record of all inquiries and your responses for future reference. This can help you track the progress of potential leads and ensure that no inquiries slip through the cracks.

By adhering to these steps and crafting an effective selling memo, you can artfully communicate the value of your business to potential buyers while safeguarding sensitive information, paving the way for a successful sale.

Crafting a selling memo is a critical step in the process of selling a business. By presenting essential facts about your business, the selling memo helps to highlight its value proposition. It showcases what sets your business apart from competitors and why it’s an attractive investment opportunity.



June 10, 2024

Recent Posts

What is Boot?

In tax terminology, boot refers to any property or cash received by the taxpayer that is not of a "like-kind" to the property being exchanged in an IRC 1031 exchange. This non-like-kind property can take various forms, including cash, relief of debt, personal...

The Indispensability of Risk

This week we have a memo from Howard Marks of Oaktree Capital written to Oaktree clients on The Indispensability of Risk Oftentimes, we’re best able to understand something we’re interested in through analogies that clarify the matter by establishing connections...