You have decided to sell and transfer your company? One of the essential steps in the transfer process is the drafting of a presentation file. This is an important element, as it is required by the future buyer of your company and his advisors. The presentation file must make your future buyer want to enter into negotiations to take over your company. However, it must not hide the weaknesses of your business and must remain objective. A pledge of seriousness for any buyer solidly advised.
So, what are the elements of this presentation file, how should they appear and what are the pitfalls to avoid? Actoria consulting firm experts give you some keys to succeed in this step.
1. The elements of the presentation file
The transfer of a company is a long-distance race that you will have to run over time. This is why, to save time and eliminate potential buyers whose project does not correspond to the intrinsic characteristics of your company and its market, you will save time by writing a flash presentation sheet.
Written on 1 to 2 pages, it presents the size of your company, the sector of activity in which your company operates, its evolution, as well as the number of employees it has. Therefore, without giving any strategic information, you will already be able to make a first selection among candidates. Make sure you do not communicate precise information that would give the buyer the possibility of identifying the company.
Once you’ve done this initial screening, you can start writing your presentation document, which can vary from 60 to 300 pages, depending on the size of the company. It includes the following elements that will inform a potential buyer more accurately:
– The company’s environment
– Presentation of its founders/managers/shareholders
– Description of the company’s premises
– The market in which you operate
– Your customers
– The company’s activity: what do you do?
– A presentation of your products or services
– Your competitive advantages
– Your competitors
– A list of your main assets
– Legal and financial elements (statutes, last 3 balance sheets, minutes of meetings and boards, auditors’ reports, all contracts subscribed by the company to carry out its activity)
– A text explaining the reasons why you wish to transfer your business
2. Attention to the confidentiality of the presentation file
The list of your customers or suppliers are so-called “sensitive” elements. To protect this information, you must absolutely require the potential buyer to sign a confidentiality agreement in which he undertakes to keep confidential the information on the company he has targeted.
This is a necessary precaution and not a waste of time since this document will apply throughout the negotiation if you go through with it. Remember that at the time of the first contacts, you do not necessarily know your interlocutor who may be represented by a third party (council or friend), or worse, a curious person looking for information on your market.
To secure your approach, in addition to signing a confidentiality agreement, you can transmit, step by step, the elements of the file by ensuring the quality of your interlocutors.
3. Paying attention to sensitive data
In the presentation document you will list your clientele. There is no need to go into detail. You can give a list of your main customers with an indication of their weight in your turnover. Your contact will then be able to get an idea of the room for maneuver he has during commercial negotiations.
Your suppliers: here again, be measured and say the essentials without going into detail at this stage. In some activities, procurement is strategic.
The financial data related to your business is provided at the end of your presentation file. There is a good reason for this: in addition to the financial elements, which are a snapshot of your company’s financial health at a given moment, the potential buyer also expects you to provide forecasting data, such as a business plan.
If your company has weaknesses, there is no need to hide them. An interested and serious buyer will not fail to notice them anyway. You can then talk about the strategy you have put in place to remedy them. You can then present, without going into detail, the strategic objectives that the company’s management has set.
4. How to write a good presentation file? Don’t forget
One essential point must not be neglected in your presentation. That of the company’s history. Your interlocutor needs to appreciate the image of your entity. The longevity and the quality of the commercial relations established with your partners, the loyalty of your personnel, or the type of management are as much information on which the purchaser cannot make the impasse and which will help him to position himself.
Human resources are also essential. Before the material assets, do not forget that the human capital of your structure has a value. As such, you will attach to your document a list of your staff and an organizational chart of the company, which is also an indicator of its importance. If certain key positions are not filled, or if departures are envisaged, the buyer must evaluate, financially, possible recruitments. He must also be able to project himself in an organization with “key” executives.
Writing a presentation file is an exercise that, while it may seem obvious at first glance, requires the writer to take a clear look at the past, present and future of his company. It is a matter of presenting the bride in her best light, while remaining objective. This is an essential step that deserves the support of an outside consultant who can take the necessary distance to formalize a well-kept document.
If you want to know how to write a good presentation file, don’t hesitate to contact the Actoria experts.
