What is an Offering Memorandum?

Business owners planning to sell their businesses will need to create an offering memorandum.  Also known as a selling memorandum, or a selling memo, this document will provide an overview of the business, and reasons why the business would make a good investment for potential buyers. Here’s what to include, in a business selling memorandum.

What to Include in an Offering Memorandum for Your Business

You should plan to work with a respected and experienced business broker to create an attractive and comprehensive offering memorandum. This memorandum should include:

  • Description of the Business

The description should give a brief history of the business, the products or services it provides, and annual sales and earnings. You may wish to include business highlights, key employees, and other respectable milestones.

  • Business Offering Price/Terms

You will clearly state the asking price, and list exactly what is included in the sale. The offering price section of the selling memo will also include all terms of the sales, qualifications required of the buyer, sales timeline, etc. 

  • Business Products or Services

In this section of the selling memorandum, you’ll need to list the products or services you offer. You should highlight top-selling products or top services. 

  • Business Operations

This section of your selling memo should include all information about hours of operation, equipment included, current inventory, and an overview of your business processes and production. 

  • Company Strengths

Highlight the strengths of your business, particularly as it relates to advantages over competitors. Challenges facing the business should also be addressed, along with ways these challenges can be overcome. 

  • Business Location & Lease

Your offering memorandum should include the geographic location of your business, along with monthly rent and your lease term.

  • Overview of Competition 

The competitive overview should summarize the business’s current position in its industry and all notable advantages. This overview should also include the number of direct business competitors in your location and industry.

  • Leadership and Key Personnel

If your business is helmed by an industry expert, this is the place to highlight them. You may also choose to describe strengths such as low turnover rates and employee experience. Titles of management along with compensation packages should be described without identifying employees by name.

  • Potential Concerns/Objectives

Address any potential concerns head-on, by clearly laying out plans to overcome competition, via marketing, expanded product lines, and any potential to add new services. 

  • Marketing

Include an overview of all marketing efforts, campaigns, and market projections from reliable sources, that will demonstrate your business’s opportunity for growth.

  • Financial Information

You will need to include accounting statements, summaries of revenue, and net income for the past several years.

  • Expansion Plans 

If your business has begun an expansion into a new market or plans to offer additional goods or services, be sure to include all plans that are in progress in your offering memorandum.

  • Appendix

In the appendix of your offering memorandum, you’ll compile necessary financial statements, examples of marketing materials, photos of your business, and other information suggested by your business broker. 

Get Help Selling Your Business in Oregon

If you’re planning to sell your business in Oregon, Northwest Business Sales & Appraisals can help. To learn more, call 541-968-2728, or send us a message.