Selling a Business

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This introductory provides a guide to the documents needed and the processes to follow when preparing to sell your business. These templates, examples and processes have been used by our business brokerage and investment banking firms to complete more than 200transactions in the past 11 years. Following these guidelines will ensure your transaction has the foundation for success.

  1. Read the whitepaper “The Anatomy of Selling a Business.” This whitepaper provides an overview of the acquisition process.
  2. Gather your preliminary due diligence items. See Preliminary Due Diligence List. We suggest you organize a Dropbox folder as listed below. The numbering system will become important as you begin to share this information with potential buyers in a preliminary data room.
  3. 1.0 Confidential Information Memorandum
  4. 2.0 Financials Data
  5. 3.0 Reports
  6. 4.0 Operational Items
  7. Prepare your financial summaries. See Financial Templates. Before building your marketing materials that will be shared with buyers, it is important to see your financial status as a potential buyer would. Business owners have varying levels of details in their financial reports. For this reason, it is best to present financial summaries first and then allow buyers to review the details after you have been able to explain the anomalies. Using our Financial Templates allows you to summarize your financials and identify areas that might be questioned by a buyer. Once your financial templates are completed, it is helpful to have your financial advisor or someone with financial reporting experience to review the summaries to help you identify items that might be questioned by the buyer.
  8. Prepare your Business Summary. See Sample Business Summary and Business Summary Template. The Business Summary “Summary” will be shared with potential buyers prior to the execution of a confidentiality agreement. The Summary provides a general overview of the business and selected financial highlights.
  9. Prepare your Confidentiality Agreement. See Sample Mutual Confidentiality Agreement. After a potential buyer has reviewed the Business Summary and has confirmed their interest, a Confidentiality Agreement (CA) should be executed. Typically, the Seller is responsible for issuing the CA.
  10. Prepare your buyer list. See Buyer Tracking List Template. Throughout the process, it is essential to track the status of each of your potential buyers so the proper follow up can occur. We have provided an Excel spreadsheet that can be used to track your buyers.
  11. Build your Confidential Informational Memorandum. See Sample Confidential Informational Memorandum. Some Sellers, but certainly not all, provide potential buyers with a detailed report of their company, called the Confidential Informational Memorandum (CIM) or the “Book”. The CIM is provided after the NDA is signed. The CIM is meant to tell a story about the selling company by providing detailed information, company stats and pertinent commentary. While time consuming to put together, we find that it accelerates the conversation with potential buyers. (If you would like to put together a CIM but find you have limited time to do so, we do provide a service to develop the CIM for you.) Some sellers choose not to put together a CIM. If you decide not to construct a CIM, it is advised that you put together a solid data room with easy to digest reports and data. See Data Room Management Procedures.