May 24, 2011

The Business Report

The main object of compiling a business report on your business is:

1. To provide a potential buyer with information on the business
2. To cover all possible objections to provide answers
3. To cover any negative aspects of your business
4. To satisfy anyone else that the buyer would be getting advice from
5. To help raise finance

A well prepared business report will become an essential tool in marketing your business. A professional broker would be able to assist you in compiling such a report that he then can use to answer most of the questions a potential buyer might have.

A good business report should include the following:

1. History

   A short background helps to give the reader empathy with the business.

2. Present Market

   A clear description on how the business makes its profit and what type of product or service it is selling.

3. Monthly Turnover

   A month by month breakdown of the business turnover is needed.

4. Financial Summary

   It is very important to state how the financial aspects of the business will be verified.

5. Staff

   Buyers are often concerned that they do not have the necessary skill to run the business. This can often be overcome by showing the expertise of the staff.

6. The following details should be covered:

   • The number of staff,
   • Their job function,
   • Salary breakdown,
   • Years of service.

7. Lease

   The basic relevant points of a lease agreement should cover:

   • Monthly rental,
   • Square metres of the premises,
   • Period of lease agreement,
   • If there is an option available to extend,
   • Annual escalation in rent.

8. Assets

   The assets of the business is the only tangible part of the business that a potential buyer will "see". It is important to have an asset list available. Make sure that all the assets are in a working order and point out the assets that need repair.

9. Reason for sale

   Buyers are always wary as to why the business is for sale.

10. S.W.O.T Analysis

    Strengths - Explain what is good about the business

    Weaknesses - Indicate where attention is needed

    Opportunity - Describe the opportunities available to expand the business

    Threats - If there is any outside threats to the business, point them out (remember your perception of a threat to the business, might not be the same as for a buyer.

11. Conclusion

    Explain why the business represents a good value and if you are open to negotiations, you must stipulate it as such.