Templates and Checklists


Sales Memorandum Template



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A sample Sales Memorandum comes with the template.


A Sales Memorandum document is used by sellers to communicate key information about the business to prospective buyers.

Use the template provided as a checklist covering the main points. Keep each point concise, perhaps using short bullet-pointed text. Remember that the real detail is provided later at Due Diligence stage. Done well, the Sales Memorandum can also help give you advance warning of additional information needed before Due Diligence.

It is strongly advised that each document copy distributed, is assigned a unique reference number marked within the footer of each page. These Selling Memorandum copies are only passed to prospective buyers on return of a signed Non-Disclosure Agreement (NDA).

Related:

Make the Summary section at the beginning brief so that it can be used for an initial email response to inquiries, and to extract a circa 20-word headline required for online adverts.

It's advisable to keep some information vague if you don't wish staff, customers, suppliers, and competitors to know your intentions.

View all forms and templates required for the sale of a business.


Sales Memorandum

(cover page)

  1. Business name
  2. Proprietor's name
  3. Contact details
  4. Unique document issue number

Summary

  1. What the business does
  2. Location(s)
  3. Year established, ownership details
  4. Why the business is an attractive proposition to a buyer
  5. Reason for selling

Brief business highlights

  1. Product or service
  2. Customer profile
  3. Main advantage(s) over nearest competitors
  4. Key market facts (e.g. trends, local factors)
  5. Graphs, quarterly sales & earnings growth (3 previous years & year-to-date)
  6. Number of employees (full-time, part-time)
  7. Key business activities
  8. Sales channels used (e.g. shop, website, distributor)
  9. Main promotional methods (e.g. advertising, social media, personal selling)

Price and terms

  1. Asking price
  2. Acceptable terms of sale (e.g. payment as part cash, part loan)
  3. Type of sale (assets only, inventory, all shares)
  4. Required buyer qualifications (experience, finance in place etc.)
  5. Transition plans (training offered, time allocated etc.)

Plans to address future developments

  1. Summarize main opportunities, challenges/risks, new competitors
  2. Actions & improvements already taken
  3. Latest projected sales & earnings forecasts

Appendices

  1. List of documents available at Due Diligence (e.g. manuals, business & sales/marketing plans)
  2. Non-Compete Agreement
  3. Seller's Disclosure Statement
  4. Photos & Marketing materials
  5. Other supporting facts & documents


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