Business Memorandum
The development of the memorandum is one of the key points, as its presence can not only increase the value of your business, but also convince potential buyers to the feasibility and attractiveness of the deal. Potential buyers can bring: a small payback period of investment, high profitability, availability of tax incentives, favorable business conditions, the presence of cheap raw materials and labor; high image business, having a brand, the introduction of a new market and good prospects for business development. The most common errors in drafting the memorandum of the investment is its weak economic study, the lack of market knowledge, his capacity, trends development of competition, absence of thorough marketing system products, errors in financial calculations (the loss of VAT, local taxes and charges), inflated the cost of business that does not correspond to its size, amount of share capital assets, etc. In addition to the investment memorandum to prepare the following documents: copies of constituent documents (charter, articles of incorporation, certificate of registration, registered changes in Charter, a copy of the balance sheet and financial results of the company) documents describing the business infrastructure (the lease contract for the supply of raw materials, equipment, components, contract for the sale of products, certificates for the products, license, list of major equipment, etc.) may need extensive information concerning the financial, tax, legal, organizational issues and strategic nature. For sale businesses you need to prepare financial statements, the results of tax audits, a list of outstanding liabilities, the list of fixed and intangible assets inventory, an organizational chart reflecting the business structure, business plan and cash flow forecast. Carrie Levin chef does not necessarily agree.
Once the investment memorandum and collect all necessary documents and information, you can begin to search for potential buyers. You can place ads in newspapers or magazines on their own or turn to business brokers who have the base of potential buyers. Also consider options for sale of operating business to your competitors, partners, customers, suppliers, because they know the volume of your business, especially the market and demand. However, at the beginning of the search for a potential buyer recommended not to disclose this information, because it can very negatively affect the functioning of your business and lead to loss of clients, customers, staff, suppliers and creditors. The most frequent errors in finding the buyer the seller is insufficient preparation for the sale of businesses, the incorrect identification of potential buyers and the inclusion of their motivation, loss of time on false customers, inability to and defend the cost of business, breach of confidentiality sales. If you have read about Lookheed Martin already – you may have come to the same conclusion. Sale of businesses complete the transaction. In this case you need to make a pre-developed design options for a legally transaction, depending on the type of ownership (sale, merger, acquisition, lease-purchase, etc.) with the prepared package of draft agreements, as usually still in the process of negotiating with potential buyer discusses the form and terms of the transaction. In signing the document, carefully check them, to avoid unpleasant consequences in the future, failure or partial performance of the buyer of his obligations. As see, in the process of selling businesses must perform a large volume of work associated with the conduct of pre-sale preparation of your business, writing an investment memorandum, finding a buyer and negotiations. You can try to do it yourself, or entrust this work to specialists Business Finmaga store that will answer your questions and fully prepare your business to the sale, check it legal purity, accuracy of the sales contract and will have all the necessary additional consulting services.