Download Sale Memorandum Template

Sale Memorandum Template
A Sale Memorandum is used by sellers to communicate key information about the business to
prospective buyers. It"s strongly advised that each document copy, however distributed, is
assigned a unique reference number marked within the footer of each page. These Sale
Memorandum copies are only passed to prospective buyers on return of a signed NonDisclosure Agreement (NDA).
Use the template 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 Sale Memorandum can also help give you advance warning of additional
information needed before Due Diligence.
Make the Summary section at the beginning brief so that it can be used for an initial email
response to enquiries, 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.
Check more at ExitAdviser.com
Sale Memorandum
(cover page)
1.
Business name
2.
Proprietor's name
3.
Contact details
4.
Document issue number
Summary
1.
What the business does, (rough) location, year established, ownership
2.
Key selling point(s)
3.
Reason for selling
Brief business highlights
1.
Product or service
2.
Customer profile & purchasing patterns
3.
Positioning vs. competitors (pricing, how compete, competitive advantage(s))
4.
Key market facts (trends, local factors)
5.
Financial overview (graphs of sales, earnings, growth, seasonality)
6.
Organization (activities, processes, supplies)
7.
People (staff, roles, issues, trends)
8.
Performance monitoring (customer service & satisfaction, quality)
9.
Routes to market (key relationships, distributors, partners)
10.
Marketing, sales approach
Plans to address future developments
1.
Opportunities, challenges, risks, new competitors
2.
Actions & improvements already taken
3.
Latest forecasts
Price and terms
1.
Asking price
2.
Acceptable terms of sale
3.
Type of sale (assets only, inventory)
4.
Leasing terms (e.g. premises)
5.
Required buyer qualifications (experience, finance in place etc.)
6.
Payment terms (e.g. part cash, part loan)
7.
Transition plans (expected training time etc.)
Appendices
1.
Further summary financials (ytd, last 3 years), asset list
2.
Organization chart
3.
List of documents available at Due Diligence (manuals, business and sales/marketing
plans etc.)
4.
Non-Compete Agreement
5.
Seller's Disclosure Statement
6.
Photos & Marketing materials
7.
Other supporting facts and documents