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Information Memorandum

Ready to sell your business privately in Australia? Our guide walks you through crafting a Business Information Memorandum (IM)—your key to hooking buyers without a broker. Learn how to showcase your business’s value, from revenue highlights to growth potential, all while keeping it concise and confidential until the right buyer steps up."

Here's a step-by-step guide to preparing a Business Information Memorandum (IM) for a small to medium-sized business in Australia:

 

Step 1: Define the Purpose and Audience

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Step 2: Gather Essential Information

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  • Company Overview: Include history, mission, vision, and business model.

  • Legal Structure: Detail the legal form of the business (e.g., Pty Ltd, Partnership), ownership percentages, and any significant legal issues or compliance matters.

  • Financial Information: Collect financial statements for at least the last three years, including balance sheets, income statements, cash flow statements, and tax returns. Prepare forecasts and projections.

 

Step 3: Market Analysis

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  • Industry Overview: Describe the industry, market trends, size, and growth potential.

  • Competitive Analysis: Discuss direct and indirect competitors, your business's competitive advantage, and market positioning.

  • Target Market: Define your customer demographics, needs, and how your business meets those needs.

 

Step 4: Operational Details

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  • Products/Services: Outline what you sell or the services provided, highlighting unique selling points.

  • Operational Processes: Document key operational aspects like supply chain, production, distribution, and any proprietary technology or process.

  • Management Team: Profile key team members, their roles, experience, and contributions to the business.

 

Step 5: Financial Projections and Use of Funds

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  • Financial Forecasts: Provide detailed projections for the next 3-5 years, including assumptions.

  • Use of Funds: If raising capital, specify how the funds will be used (e.g., expansion, marketing, R&D).

 

Step 6: Risk Analysis

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  • Risks: Identify potential risks (market, operational, financial, regulatory) and discuss mitigation strategies.

 

Step 7: Legal and Regulatory Information

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Step 8: Drafting the Document

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Executive Summary: Write this last, summarising key points to entice readers.

Structure the Document: Use headings, subheadings, and bullet points for clarity. Include:​

 

  • Table of Contents

  • Executive Summary

  • Company Overview

  • Market Analysis

  • Operational Details

  • Financial Information

  • Legal and Regulatory Information

  • Risk Analysis

  • Appendices (for additional detailed data)

  • Cover Page

 

Step 9: Confidentiality and Legal Considerations

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  • Non-Disclosure Agreement (NDA): If necessary, include or reference an NDA to protect sensitive information.

  • Disclaimers: Add disclaimers about the accuracy of the information and any forward-looking statements.

 

Step 10: Review and Refine

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  • Internal Review: Have key management review the document for accuracy and completeness.

  • Legal Review: Consult with a legal advisor to ensure compliance with Australian law, especially regarding securities offerings if investors are involved.

 

Step 11: Professional Presentation

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  • Design and Format: Ensure the document is professionally formatted with clear graphs, charts, and images if applicable.

  • Proofreading: Check for errors in grammar, spelling, and consistency.

 

Step 12: Distribution

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  • Targeted Distribution: Send to potential investors or buyers under confidentiality.

  • Follow-Up: Be prepared to answer questions and provide further information during the due diligence phase.

 

By following these steps, you can create a comprehensive, persuasive Information Memorandum tailored to small to medium-sized businesses in Australia. Remember, while this guide provides a structure, each business might need to adjust details based on its unique circumstances.​​​

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