How to Sell Your Business – Selling a Business; Marketing Documents – The Teaser
How to Sell Your Business – An Article Series by Harvest Business Advisors, Business Brokers, Investment Bankers, and Business Valuation Experts
There are two primary marketing documents used when selling your business. They are called the business One Page or Teaser and the business Confidential Sales Package. These documents are used to interest and then qualify prospective business buyers about your business. More qualified prospects translates to more interest and a higher sales price.
These documents are important sales tools in the business sale process but they do not sell the business. In this article I will talk about the teaser. In a future article I will talk about the Confidential Sales Package.
The Teaser is a public document that is used to attract business buyer prospects. The two goals of the teaser are to generate qualified buyers and protect the confidentiality of the business. The teaser may be sent to prospects directly. Additionally the information in it will be used as the backbone of advertising such as direct mail and listing websites to attract qualified prospects.
The hope is that you could get the information in the teaser on the front of the Wall Street Journal and generate tons of qualified interest in the business. Most important to remember is that the teaser is a marketing document that must generate actionable responses. Well written teaser’s carefully walk the line of being specific enough to generate a high percentage of qualified leads yet not give away the confidentiality of the business. Protecting confidentiality is pretty easy for restaurants and convenience stores which are quite common. It is more difficult to protect confidentiality with larger businesses that may have limited competitors in a geographic area. This is usually addressed by making the description more general. For instance a airplane part distributor maybe become a specialty equipment part distributor.
Teasers should be limited to one page and point out the benefits of buying the business. The teaser should state who is the best buyer. How will the buyer benefit and why will this business be a good fit. Finally, teasers should show three or more years of summarized financial data. Revenues, gross margin when appropriate, profits, and normalized cash flows. Studies have shown that less financial information reduces response. Buyers are skeptics and assume missing data must be bad (often even worse than reality).
Remember, with the teaser you are generating leads and protecting confidentiality. The teaser does not sell the business. A quality teaser does generate qualified prospects which is a necessary starting point to sell your business for the highest price.