What buyers want to know before they make an offer

The short version

• A buyer reads your [CIM](/learn/reference#confidential-information-memorandum "The document that describes a business for sale to a buyer who has signed a non-disclosure agreement. The numbers, the history, the customers, the people and the reason for selling.") looking for one thing: whether the earnings will continue after you leave.
• They look for risk first: dependence on you, concentration in customers, gaps in the team.
• They look for proof: numbers that tie together and claims backed by records.
• They look for fit: whether this is a business they can run and grow.
• A CIM that answers these questions directly gets serious buyers to the next step.

The question behind every page

The CIM is the confidential information memorandum, the full document a buyer reads about your business. Every section is read through one question: will the money this business makes for its owner keep coming after the sale?

Buyers are paying for future earnings, with borrowed money. Everything in your CIM either raises their confidence or lowers it.

What buyers look for first

Risk. Where could the earnings break?

• How much depends on you. Lesson 4.2.
• How concentrated your customers are. Lesson 4.3.
• Whether key people will stay. Lesson 4.6.
• Whether the lease and key contracts will transfer. Lesson 5.6.

Proof. Can the claims be checked?

• Numbers that tie to tax returns.
• Add-backs with records behind them.
• Trends shown over three to five years, not a single good year.

Fit. Can this buyer run it?

• What the day-to-day work involves.
• The skills and licenses required.
• How the business finds and keeps customers.

Upside. Where could a new owner take it?

• Services not yet offered, areas not yet served, prices not raised in years.

What turns buyers away

• Claims without proof. "Strong customer loyalty" means little without retention numbers.
• Missing weaknesses. A buyer who finds a problem you left out wonders what else is missing. Lesson 6.4 covers this.
• A price the numbers cannot support. Lesson 3.1 covers why that ends conversations.
• Vague reasons for selling. Lesson 6.5 covers this.

Write for a lender too

If your buyer uses a loan, the lender will read your CIM as well. Lenders focus on steady earnings, clean records and whether the business can make the loan payments. A CIM that works for a lender works for almost any buyer.