When selling a business, your business broker will most likely create a Confidential Information Memorandum or CIM. Your business broker will present the CIM once the prospective buyer has signed all the necessary confidentiality documentation. This document must build trust between both parties. This will go a long way toward achieving a successful deal.
Be Honest
Your CIM will be 95% positive. The bulk of the document will be dedicated towards promoting your business. For this reason it makes sense to disclose some potential problems. The disclosure of problems can actually be a strong asset when handled correctly.
Current weaknesses of your business could become strengths in the mind of the buyer. Take for instance a business with a poor online presence. This may represent a significant opportunity for a buyer to improve marketing and communications. Don’t be afraid to include negative information. That information could represent an opportunity.
Share Information
It is imperative that there is an element of trust between the parties. Creating that sense of trust begins with the CIM. Buying a business is a lot different than buying a home. When buying a home, the person usually doesn’t care too much about whom they are buying the home from. Buying a business is usually a different experience. Your buyer will want to feel as though they have a good understanding of who you are and what you are about.
Your business broker will want to interview you to gain ample information to include in the CIM. A potential buyer should be able to pick up the CIM and get a good feel about you and your business. It will be much more challenging for the deal to be successful if you don’t establish a level of trust.
EBIT’s Confidential Information Memorandum gets the buyer to the door without the risk of disclosing confidential business data to unqualified prospects.