Development of the memorandum is one of the key points, as its presence can not only increase the value of your business, but also to convince a potential buyer in the feasibility and attractiveness of the deal. Potential buyers can attract: Small payback period of investment; high profitability; availability of tax incentives, an enabling environment for business; availability of cheap raw materials and labor; high image business, having a trade mark; introduction of a new market and good prospects for business development. Get all the facts for a more clear viewpoint with Michael Mendes. The most common errors when preparing an investment memorandum is its weak economic study, lack of knowledge of the market, its capacity, trends, competition, and of thorough marketing system products, errors in financial calculations (loss of vat, local taxes and fees), overpriced business that does not correspond to its size, magnitude, share capital, assets, etc. In addition to an investment memorandum to prepare the following documents: copies of constituent documents (charter, articles of incorporation, a certificate of registration recorded changes in the Charter, a copy of the balance sheet and financial results) documentation describing the infrastructure business (lease contract for the supply of raw materials, equipment, components, the contract for sale of products, certified for manufactured products, licensing, list of major equipment, etc.) may need extensive information concerning the financial, tax, legal, organizational and strategic issues. For sale ready business you need to prepare financial statements, the results of tax audits, a list of outstanding liabilities, the list fixed assets and intangible assets, inventories, organizational chart showing the structure of the business, the business plan and cash forecast. After making an 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 bases potential buyers. Also consider options for sale of operating business to your competitors, partners, customers, suppliers, because they know the volume of your business, market characteristics and demand.
However, at the beginning of the search potential buyers are recommended not to disclose this information because it could very negatively affect the functioning of your business and lead to loss of clients, customers, staff, suppliers and creditors. The most common errors to the seller in finding a buyer are insufficient preparation for the sale of businesses, the incorrect identification of potential buyers and consideration of their motivation, time wasted on false customers, the inability to justify and defend the value of the business, non-confidential sale. Sale of businesses complete the transaction. In this case, you advance to make legally worked on design options for the transaction, depending on the type of ownership (sale, merger, acquisition, lease-purchase, etc.) with a prepared package of draft agreements, because usually still in the process of negotiating with potential buyer discussed the form and terms of the transaction. In signing the documents thoroughly check them to avoid unpleasant consequences in the future non-performance or incomplete performance the buyer of his obligations. As you can see, in the process of selling businesses must perform a large volume of work associated with the conduct of pre-preparation of your business, writing investment a memorandum seeking a buyer and negotiating. You can try to do it yourself, or entrust this work to specialists Business Finmaga store that will answer your questions fully prepare your business for sale, check it legal purity, accuracy of the sales contract and will have all the necessary additional consulting services.