Business Opportunity Memorandum, what is it?
In a similar way that Real Estate Agents prepare a presentation folder for the property that they are selling, a similar documents is prepared for the sale of a business. This can take different names, I like to refer to it as Business Opportunity Memorandum, or BOM for short. In the industry is also referred to as the book, a business summary, a business profile, or similar names that refer to the content.
The purpose of this is to collect in one document all the relevant information about the business, so as to give the same basic information to prospective buyers who may be interested in the business. This is intended to save time so that the owner won’t have to repeat the entire story about the business to each suitor, and also provides in one document a uniform basis for comparing one offer versus the other, because all the prospects will be receiving the same basic information. This will also serve as a reference documents for the prospective buyers’ lawyers, accountants and advisors who will be analyzing the business opportunity, participate in the buyer’s due diligence, and provide advice to the buyer with respect to the acquisition.
The Business Opportunity Memorandum (BOM) can be made available in the form of a booklet, or as a PowerPoint slide presentation.
The owner of the business is the best source for preparing portions of this document, because he is intimately familiar with the workings of the business, the history, the future prospects, and can impart a personal touch to the presentation. Some parts need the attention of the broker involved in the sale, in order to put into proper perspective those parts of the business that are of interest to buyers, and that the buyers need to see in order to formulate in their mind what benefits the business may offer them so that they become motivated to pursue the acquisition.
To have one prepared for you, please submit the contact form and refer to the BOM.
I will get back to you afterwards.
Franco Di Giandomenico, M.B.A.
June 14, 2019