The Offering Memorandum
A solid, factual and compelling offering memorandum maximizes the chances of not only selling a business, but obtaining the highest possible price. An offering memorandum is also referred to as the selling memorandum, a confidential descriptive memorandum, or simply as “the book.” The memorandum, regardless of the terminology used, must be as factual as possible, but the Executive Summary...Read More
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Considerations When Selling…Or Buying
Important questions to ask when looking at a business…or preparing to have your business looked at by prospective buyers. • What’s for sale? What’s not for sale? Does it include real estate? Are some of the machines leased instead of owned? • What assets are not earning money? Perhaps these assets should be sold off. • What is proprietary? Formulations, patents, software, etc.? • What...Read More
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Reasons to Sell / Reasons to Acquire
A January 2004 survey conducted by the DAK Group/Rutgers found the following breakdown of why businesses are for sale: Reasons To SellRisk reduction 44% Competition or market changes 41% External pressures 27% Lifestyle factors (age, health, etc.) 14% Lack of capital 9% Ownership/management issues 07%Note: Multiple responses allowed; Source: DAK Group/Rutgers It is...Read More
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Keys to a Successful Closing
The closing is the formal transfer of a business. It usually also represents the successful culmination of many months of hard work, extensive negotiations, lots of give and take, and ultimately a satisfactory meeting of the minds. The document governing the closing is the Purchase and Sale Agreement. It generally covers the following: • A description of the transaction – Is it a stock or...Read More
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Seller Financing — How a Broker Can Help
Another important factor relating to the asking price is the amount of cash involved in the sale. There is an old saying that the higher the full-price, the lower the down payment – and vice-versa. The sale of almost any business involves some seller financing. The smaller the down payment, the higher likelihood of a quick sale. No seller wants to take back his or her business because...Read More
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