Order the complete book "How to Sell your Mail / Parcel Business"
by James Baer

The following is an excerpt from the book "How to Sell your Mail / Parcel Business" by James Baer

THE SELLING TOOLS

We’ll discuss all these matters in some detail, but here’s the list of items you should set aside so that they can be accessed without delay:

1.  Prospectus
2. One Page Summary
3.  3 years of detailed bookkeeping records including P&Ls, Balance Sheets and supporting statements.
4.  3 years of Schedule C of your Federal tax return or your Corporate returns.
5.  Premises lease.
6.  Equipment leases, if any
7.  Supplier and Vendor listing (name, address, telephone, etc.)
8.  Inventory listing including current value
9. Equipment listing with current value
10. Anything else that might be pertinent.

PROSPECTUS or SELLING DOCUMENT

A Prospectus is a written summary of important facts about a business.  It is not a tell-all expose, nor is it simply a long-winded collection of hype.  The key word here is “summary” and we should agree that the Prospectus is just that, and not intended to be a comprehensive description of the business which would take the place of salesmanship or more detail.  Ideally, the Prospectus should provide a Buyer with much information that otherwise would have to be obtained by questioning the Seller.  You can save that time by having it all written down.

The Prospectus also demonstrates that you are a careful, well-prepared Seller.  By being organized you can give the Buyer confidence that this is a well-managed, good business that has operated under the direction of a caring steward.

Writing a Prospectus is not something that everyone can do effectively.  Some of us simply don’t write well, others are format – challenged, and others can’t be dispassionate.  The message here is that one should get some help from someone familiar with these matters.  It’s very much the same as composing one’s résumé.  While we all think we can do it, one’s résumé is seldom as good as it could be.

If you think of this exercise in light of its importance, it should be crystal clear that creating the Prospectus warrants the best that can be accomplished.  It will promote what probably will be the largest transaction of your business life, and one that could have a significant impact on your future.  With this in mind, it will be to your benefit to have the assistance of someone who understands just how vital these documents are.

As in many aspects of life, the way the Prospectus is organized and presented is as important as its factual content.  While a laundry list of information might satisfy some, it is far better to present the information in a readable, simple manner that makes it easy for the reader to understand.  If, for instance, the Prospectus raises more questions than it answers, it is failing to meet its objective.  Here is a simple outline of a Prospectus written for a mail/parcel business:

1. Special Aspects of the Store.  This is a simple listing of 5-10 key selling points that should encourage a prospective buyer.
2. Table of Contents.  Yes, even in this relatively short document, it will be helpful to allow the reader to see, up front, what is included.
3. About the Mail/Parcel Business.  Most buyers know nothing about the industry.  It will increase their comfort level if we provide some general background.
4. An Overview of the Store.  This is a general discussion of the store, its ownership, its history, the services that are offered, lease and location information.
5. Management and Employees.  Who runs the place?  How many employees are there?
6. Customers.  Describe what kind of customers patronize the business and what they purchase.  Here also can be a discussion of credit, accounts receivable, bad debts (if any) and other customer-related issues.
7. Competitors.  Often avoided, a straight-forward discussion of competitors is useful.  Mention the Post Office, freight carriers and similar stores, and point out why your store is not harmed by these.
8. Franchise Support.  If you are a franchise member, you’ll want to tout the benefits you receive from the franchisor.  After all, the buyer will be buying into the franchise and will benefit from this information.
9. Assets.  It’s not enough to say that you are selling “everything in the store”.  An astute buyer will want to know exactly what he’s getting (and the IRS requires that all these items be priced).  So make your list now and assign a fair market value.  In this same section it would be wise to list those specific items that will not be included in the sale.  Personal equipment, such as a laptop, might fall into this category, as well as rented or leased equipment (postage meter, etc.).
10. Financial Results.  A typical buyer will want to determine whether the business is producing the results he expects.  It is customary to have 3 years of results available.  Don’t just add your financial statements to the Prospectus, since they probably aren’t as clear as they might be, and will have far too much detail.  A simple display of Total Sales, Cost of Goods, Gross Profit, Expenses and Net Profit might be enough.  I do feel, however that it is much more descriptive to list the 3-5 largest Sales categories, along with the costs to provide these.  In addition, most buyers want to see what expenditures are for such things as Advertising, Rent, Payroll, Telephone and Utilities.  This will also be a good place to list “Owner’s Compensation” as it was described earlier in this chapter in the discussion about setting a Selling Price.
11. The Future.  Since buyers will experience the future, it makes sense to suggest just how good that might be.  To do this, you’ll have to make certain assumptions, and record them so the Buyer knows how you arrived at your estimates (even if he doesn’t agree with them).
12. Your Reason for Selling.  It can be as simple as “Retirement”, but a buyer would like to know.
13. Offering Price.  What’s the price?  If you have special, non-negotiable terms (such as cash only) it would be well to mention them here.

If you simply devoted a separate page to each of the items in this list, you’d have a 13 page Prospectus.  Some pages might have but a line or two, and other sections (like 4, 9 and 10 above) might consume 2 or more pages.

Now that we have a basic outline, or Table of Contents, the next step is to write the text.  To do that, you might ask yourself, “What would I like to know if I was buying a business with which I was not familiar?”  To assist in this, turn your attention to the Questionnaire which appears in the next 5 pages.

Order the complete book "How to Sell your Mail / Parcel Business"
by James Baer