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Insights > How Do I Sell My Business? Part II – Preparing The Documents

How Do I Sell My Business? Part II – Preparing The Documents

By Generational Equity

sell my business part 2

This post is the second in our series designed to help business owners discover the key steps involved in successfully finding a buyer/investor. Earlier this week we looked at four risk areas that buyers focus on and provided ways to impact them, which would enhance the company’s valuation and sale-ability.

Today we look at a step that is often overlooked by sellers: creating key documents to protect the company and attract professional buyers. Both are equally critical. The key documents we are referring to include:

All three of these go hand in hand and are equivalently vital.

To begin, before sending detailed information about your company to any buyer, be sure to create an ironclad Confidentiality Agreement (CA). To be safe, it is a good idea to have an attorney draft this for you and if you can afford it, preferably an attorney who is well versed in M&A transactions. This point cannot be stressed too heavily.

You need to protect your business from unscrupulous competitors who would like to gain access to your company’s operating metrics and competitive strengths. If you send information to a buyer without getting a signed CA first, you open yourself and your business up to significant risks. Spend the money necessary and hire an attorney to create a solid, workable CA.

After the CA is created, your next task is to create an Offering Memorandum (OM). This is the document you will send to buyers after they sign and return your CA. What do you need to include in your OM? Depending on your business, some of these items will include:

  • Three years of historical financials
  • Five years of projected financials (based on recast numbers)
  • A full description of the company that should include a complete history of the business, its current operations, and future growth opportunities
  • A SWOT analysis on the business (strength, weakness, opportunities and threats)
  • An analysis of the projected growth of your industry
  • A discussion of the key end markets you serve and their projected growth
  • An examination of key clients
  • An analysis of vital suppliers
  • Full disclosure of significant contractual relationships with suppliers/customers
  • An organizational chart with a focus on critical employees and their relationship with the company
  • A full list of off-balance sheet assets that make the company unique and successful

Looking at this list of typical Offering Memorandum contents it is pretty clear that unless you are a trained accountant, you will most likely need help from a financial professional for some of this information.

For example, if you are unfamiliar with the recasting of financials, it will be vital to hire someone that is. Recasting allows you to restate the true profitability of your business. Most likely you and your accountant have worked hard over the years to help you personally retain as much of the company earnings as possible. Typically this means that the company’s true profitability is most likely much higher than what your historic financials portray. If you don’t make the effort to recast your historical financials, odds are good that you will be undervaluing your business.

The Valuable Features

In addition, one of the key areas of the OM that you will need to address is identifying those features of the business that make it unique; we call these Intangible Assets (a.k.a. off-balance sheet assets) because they are not necessarily accounted for directly in your earnings but they play a HUGE role in the company’s success.

Often this is a challenge for many business owners. Usually the entrepreneur is so close to the daily operations of the company that he/she does not have the ability to objectively view the business as a buyer would. Taking the time to truly catalog what makes your business distinctive is critical for the creation of your offering memorandum.

One thing to NEVER mention in your OM is the price of the business. There is an old saying: “He who mentions price first loses.” This applies to the sale of your company. Let the buyer(s) tell you what it is worth after they review your OM and spend some time learning about the business.

The final document you will need to create is the Confidential Business Profile (CBP) or teaser. This is a 1- to 2-page document that takes key information from the OM and “highlights” those items that you want a prospect to immediately be aware of regarding your opportunity. Typically you will want to show a summary of three years of historic revenue and earnings as well as your five-year forecast.

Also, be careful to not disclose too many specifics about your company’s location and any unique identifiers that might enable an industry insider to determine who you are. Provide just enough details to get them interested without breaching your confidentiality. This is a fine line to walk and you may need to create several different versions of your CBP depending on the types of buyers you will be approaching.

And again, never mention price in the Confidential Business Profile, AND do not send the Offering Memorandum even if someone expresses interest until they return your CA signed and dated!

If you take the time to carefully craft these three documents, you will be in much better shape to attract the attention of professional buyers to your opportunity. If you would like to see some actual samples of these documents, attend a complimentary Generational Equity M&A seminar. We conduct these throughout North America and odds are good that we will be near you soon. To find out more about our services, please visit our website, provide us with your contact information, and we will be in touch.

Carl Doerksen is the Director of Corporate Development at Generational Equity.

© 2021 Generational Equity, LLC. All Rights Reserved.


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After attending a conference with GE, I decided that the value they bring would be worth the expense and as soon as I started working with them, I realized that was the right decision. When we started to get LOIs, Fred Zweifel took the lead on the communication and supported negotiations throughout the process, which got tricky as we moved forward. I learned that it can be common for companies to make a great offer then work to erode that price with their discoveries, but Fred and the GE team kept that from happening.
Caroline Connelly, CEO, OptoTest
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.
Pete L.
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
We had the pleasure of working with Mr. Ahmad Behjati Managing Director, M&A, for Generational Equity during our acquisition of Papa's Dodge in late 2021. Generational Equity and Mr. Behjati represented and marketed Papa’s Dodge. As our primary contact, Mr. Behjati was professional in every facet of this acquisition process, conveying valuable advice most times and assisting us in every step of the process.
Rick Greene of Dobbs Equity Partners LLC
I wanted to take this opportunity to thank you for all that you have done for us. Not only did you take care of all the aspects of the sale but took extra care to make sure we knew what it looked like every step of the way. I will definitely recommend your company to anyone that is in a position to or looking to exit their business.
Shane and Johanna Kline, Owners of Vision Upfitters
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers
Thanks to you, the entire GE team and especially Michael Goss for driving a great valuation, coaching me and driving the process across the finish line. Please let me know if there is anything I can do to support GE going forward.
Tom Currier, Former President & CEO, Rackmount Solutions
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!
JoAnn Ellis, Owner of Fondren 5 Star Kennels
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
The most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.
Salvo Stoch, Founder and CEO of Sleeping Partners
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.
Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software
We were represented by Michael Goss with Generational. The due diligence was grueling and exhausting, but Michael propped us up and kept us motivated throughout the process. Debi and I continued to ask each other how we could possibly make it through this process without the assistance of Michael. Michael's professionalism and knowledge is absolutely amazing, and we are so blessed to have had him by our side as we made our future dreams come true.
Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
I decided to attend the conference and hopefully receive some guidance on how to structure an exit plan of my business. Upon arriving at the conference, I was so impressed with the presentation given by Generational Equity that I set a future appointment that week to discuss the possibility of selling my business with their Senior Managing Director David Robinson.
JoAnn Ellis, Owner of Fondren 5 Star Kennels
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers
The professionals at Generational Equity then helped develop a roadmap for enhancing the value of the firm and an evaluation report. This was completed by June 14, 2021. We then developed the Confidential Information Memorandum and put Taylor Studios, Inc. on the market by July.
Generational Equity’s professional staff helped me every step of the way. Their network and professionals are the only reason I sold my company this quickly. For me this is a once in a lifetime sale and I was unfamiliar with the process. I was able to lean on them with questions and concerns.
Betty L. Brennan, President, Taylor Studios
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!
Eric Erlandson, Owner, Action Fastenings, Inc.
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
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Larry Moore, Owner, A Company Portable Restrooms
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