Capitalize on your decision to sell


September 25, 2020



You and your business will be better off if you prepare now for the future.

If you’re thinking about selling your company, there are some other things you should be thinking about, too, like “Is now the time for me to sell?”

To answer that question, there are other questions you should ask — and perhaps seek expert advice. Some of those questions include:

  • Will I get enough money in the purchase price, after I pay taxes and debt, to afford a comfortable living for the rest of my life — or to support what I choose to do “in the second half”?
  • How much personal debt do I have, and that I still will be responsible for after I sell my company?

Depending on the answers to those questions, you can then think about your options, which include:

  • Continue to do what you’re doing now for a while longer.
  • Hire a consultant who can help you prepare your company for a sale.
  • Retain assistance to get your company on track for exponential growth and profit, and ramp up toward a better purchase price later.


If you determine it is time to sell, keep your foot on the gas. Don’t go into harvest mode: Sometimes, when owners decide to sell, quite a while before the sale or before the company is put on the market, they stop investing in growth and the future of the company. This is done to maximize short-term profits and milk recurring revenue. Do not do this without discretion.


Is your company ready to be sold? Ensure that your company is in a position that is attractive to buyers and gets you the most in a purchase price. It may be time to retain a consulting firm to help, or network with others who have a record of building great businesses that have achieved great growth and profit over the course of many years.

It may just mean that you jump back into your business with both feet, and go at it until your company is in good enough shape to be taken to market.

The following factors are meaningful to buyers, and will help you get an attractive purchase price:

  • Consistent growth.
  • Consistent strong profit margins.
  • Good employee retention.
  • Good customer retention.
  • Well-maintained assets to service the customer base.
  • Efficient and effective systems and procedures.
  • Healthy company culture.
  • Productive selling strategies and processes.
  • Recurring revenue as a large majority of revenue.
  • Brand equity.
  • Good corporate image.
  • Capable management and middle management.

Note that these factors also are what you want in your company even if you do not plan to sell. Regardless of where you are in the decision-making process, there is something you can do today that will assist you greatly if you are in one of the following positions:

  1. Ready to sell, and your company is ready to be sold.
  2. Ready to sell, but your company is not ready to be sold.
  3. Not selling at this time, and may not for years to come.

That something, no matter which of these three situations you are in, is to have a confidential information memorandum (CIM) created for your business by a consultant or merger and acquisition company. A CIM is obvious for the first two positions. But you may be thinking: “I am not even thinking about selling my company anytime soon, if I ever do sell it. So, why would I bother with having a CIM professionally prepared for my company?” Before we answer that question, let’s discuss what a CIM is.


A CIM is a document used in a sell-side engagement to market a business to prospective buyers. It also is referred to as the “pitch book,” the “offering memorandum” or simply “the book.”

It is crucial that all valuable attributes of the business are highlighted in the CIM to get the best terms and highest possible price. To obtain a premium valuation, it is extremely important to clearly articulate all of the company’s attributes. A CIM is not sent to any interested buyers until they sign a confidentiality agreement or non-disclosure agreement (NDA).

A CIM typically will contain the following:

  • Cover page.
  • Table of contents.
  • Notice/reminder of confidentiality.
  • Executive summary.
  • Corporate information and history.
  • Detailed description of the business and its operations.
  • Financial information, including analysis of historical results.
  • Owner/senior benefit worksheet with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
  • Account breakdown and customer diversification/customer base information.
  • Asset schedules (vehicle list and information).
  • Management team information.
  • Organizational chart.
  • Marketing information.
  • Sales process.
  • Growth opportunities.
  • Employee benefits package.
  • IT information and technology employed.
  • Awards and recognitions received by company.

Having a thorough and professional set of investment marketing materials will have a substantial impact on the success of the merger and acquisition process in at least three areas:

  1. The speed of the process. The more questions that are answered in your CIM, the fewer questions you will have to answer piecemeal to get buyers familiar with your business, its dynamics, position, unique selling propositions/points, niches, and so on.
  2. The efficiency of the process. The more information you provide buyers, the more quickly they can determine their true level of interest in the opportunity. You don’t want to waste time bringing every potential buyer up to speed individually. A CIM screens out those who are not interested in your industry or business. A good CIM will pique the interest of genuine and qualified buyers.
  3. The overall buyer perception that contributes to their valuation considerations. Buyers are influenced by appearance. Don’t do your company an injustice by not having a solid CIM.

The purpose of the CIM is to help a buyer understand your business and the unique strategic investment opportunity it presents. Buyers all have acquisition criteria, and the CIM will help them match up your business to that criteria. The CIM will make it so only potentially interested buyers are calling with questions. Those follow-up questions will focus more on topics like valuation and desired deal structure, instead of basic information about your company.


So, why should you have a CIM if you don’t plan to sell your company? You may not be considering selling, but there are other important reasons to have a CIM created for your business. The exercise of creating a CIM helps business owners:

  • Identify opportunities for improvement.
  • Uncover issues within the company that can be corrected.
  • Have a useful tool when approaching lenders.
  • Be prepared for emergency situations if capital needs to be raised quickly.
  • Obtain profit-and-loss analysis and advice on all the major business disciplines within your company.
Greg Clendenin

Greg Clendenin

The benefits of creating a CIM far outweigh the cost of having it done. Whether you and your company are ready for a sale, or you are ready but your company isn’t quite there, or if you aren’t thinking about selling now, but want to get your company on the path of exponential growth and profit, a CIM should reflect your company properly and all the years of hard work you put into it.

CLENDENIN is CEO of The Clendenin Consulting Group ( He was a CEO and owner in the pest and lawn industry for 38 years. He can be reached at

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