Sales Memorandum Tool



Your Online Sales Memorandum Creator

A Sales Memorandum is used by sellers to provide important information about their business and its key values to prospective buyers.

In most cases, copies of the Sales Memorandum are only given to prospective buyers if they agree to sign a Non-Disclosure Agreement (NDA) first.

Your inputs are compiled into a Sales Memorandum document that you can download/export to an MS Word or PDF-file.

Use this tool as a checklist for covering the main points. Keep each point concise. You can make it more attractive to follow if you include financial sheets/charts, and images of your business. However, keep in mind that the real details are provided later at the due diligence stage.


Business name

Proprietor's name(s)

Contact details

Insert your business address, email address, and phone number.

Business main location  

City

State

Country

Other locations

List other locations and their purpose (if any)

What the business does  

Briefly describe the main purpose of your business and the sector in which it operates. NB! This section is required in order to get your sale listing ready to go.

Category  

Business category, for example, "restaurant", "carpet cleaning". The category is a key element to bring forward your sale listing and enable PPC advertising.

Company website  

Enter the URL address of your website. Leave blank if there's none, or you do not want to reveal it.

Year established and history

When the business was established, where, and by whom. Give the main historical facts and/or key events during the business's history.

Why the business is an attractive proposition to a buyer  

It’s important here to be persuasive. You must highlight the positive reasons as to why a buyer would want to purchase your business. Do this by describing its strengths, key values, and potential for future growth.

Reason for selling  

Your reason for selling; make is short. Be careful not to appear too desperate to sell. Avoid any mention of negative reasons for selling-up and moving on.

Independency on the present owner

This is where you declare that your business is already well prepared to continue without your personal and unique presence. A prospective buyer wants to assume that the key information and customer/supplier relations are well documented and professionally handled by the company's staff.

Product or service

Briefly describe your main product(s) and/or service(s).

Customer profile

Do you sell to businesses or consumers (or both)? Briefly describe the typical profile of a customer that would purchase your products or services.

Sales channels used

Briefly explain the sales channel(s) where your targeted customers can purchase your products or services, whether this is a shop, website, distributor, or some other sales method(s).

Key market facts

Include key market facts; prioritizing market size, trend direction, and market share. This is important information for a buyer, so do your research and reference any relevant reports which support it. Enter the total market size in units or value, ideally both. After that, indicate whether the market is growing, declining, or staying pretty much the same. Finally, enter your current percentage of the market share.

Main promotional methods

Outline the main promotional activity that is used to build awareness and interest in your offers and brand, such as advertising, social media, personal selling, or other methods of marketing.

The value proposition

Why are customers buying your products or services? What motivates them to select your offer above the competing ones? Is it uniqueness, pricing, location, quality of services, etc.? In other words, try to summarize your "value proposition".

The main advantage(s) over nearest competitors

Businesses that survive and make sustainable profits have found a formula for adding value to customers. This formula involves companies making their offer distinctive from the competition. Briefly describe your main advantages as compared to competing rivals. Name and shortly describe 1 to 3 of your nearest competitors on the marketplace.

Number of employees, full time

Number of employees, part-time

Key financial facts and forecast  

Business financial strength is of vital concern to potential buyers. Describe your company's financial position by providing facts about past performance, and where it's heading next (forecast income statement for the next 3 to 5 years). Shortly describe your business's debt vs equity position.

 

Key Financials

Key Financials


 

Income Statement

Income Statement


Staffing

Describe your staffing situation and policy. Note particularly if you’re a significant user of subcontracted labor. Enter the number of full-time and part-time employees in your company.

Asking price  

Type your asking price or price range. Leave it blank if you prefer people to get in touch for a quote.

Take the value from the Business Valuation tool ($320,000)

Comment on asking price  

Add further comments (if any) on the asking price

Owner financing  

Owner financing is a solution where instead of getting the funding from a bank or other finance provider, the buyer borrows all or part of the sale price from you - the seller. Tick this box if you are willing to consider owner financing.

Owner financing terms  

Add any details/terms about your owner financing option (if any). These details/terms could include the loan amount or percentage of the purchase price, term length in years, interest rate, and repayment schedule (monthly, quarterly, yearly).

Transition of business ownership

What plans do you have in place to ensure a smooth transition of business ownership? Measures might include training, a stated post-sale time commitment for hand-over completion, or even a willingness to stay on in the business for an agreed period.

Required buyer qualifications  

In considering a prospective buyer, what are the minimum qualifications they need to have, if any? Clearly state the buyer criteria here that is acceptable to you, such as prior experience and available finances. This can help significantly reduce applications submitted by time-wasters.

Type of business sale

What type of business sale is it? It’s best here to clearly state your preference, whether you prefer an asset sale, transfer of membership, or a shares/stock transaction, without going into any detail at this stage.

Terms of sale

What terms of sale are acceptable to you? Here’s a chance to lay-out your minimum acceptable terms for a deal (if any). This helps set buyer expectations at an early stage, perhaps scaring off the less serious.

NB! There are a few more key sections

ExitAdviser is a DIY platform to prepare and promote a small business for sale. Sign up, and make use of online tools, legal templates, and routes to market.

Plans and Pricing 

The challenges and risk

All businesses have challenges and risks, so it wouldn’t be wise to pretend otherwise. Describe the top 2 to 4 main challenges and risks here that are most likely going to impact your business within the next 12 to 24 months.

New or emerging competitors

Describe the impact on your profitability due to any new significant competitors that have entered your market during the past 1 to 2 years, or new ones that you know are about to enter.

Improvement actions already taken

By highlighting 2 to 5 significant improvement measures that you’ve taken, particularly in recent times, you’ll demonstrate a progressive and proactive approach to running your business.

File attachments

You can upload files such as spreadsheets and presentations to be attached to your Sale Memorandum. Use the file uploader tool below. You may add comments about the files appended.





File uploader

Name or description of the file (optional)

 

Up to 10 files allowed.





More on Presenting Your Business for Sale

How to Prepare Your Selling Memorandum (a how-to guide)

Sales Memorandum Template (with file download)

Business Presentation Template (MS PowerPoint)


Next: Set up your sale listing and Landing Page with the Go-to-Market tool

Go-to-Market Tool



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Disclaimer

Important information, please read carefully before using this Tool.

The Sales Memorandum Tool is designed to create a summary document presenting prospective buyers with most of the information they need in deciding whether to enter negotiations with you. ExitAdviser takes no responsibility for the content that you enter in the Sales Memorandum (SM) or campaign Landing Page (LP). Before publishing either your SM and/or LP you are strongly advised to check all your content very carefully for errors or for confidential information. Further, you are strongly recommended to insist on a signed Non-Disclosure Agreement before sending out each (uniquely numbered) SM document to prospective buyers.

The example business referred to here, namely WZY Cleaning Services, and all the characters mentioned in this example, are fictitious. Any resemblance to an actual business in New York State (or anywhere else in the US), or to real life persons, living or dead, is purely coincidental.