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Tips for building perfect information memorandum


You have an investment meeting coming up. Your pitch is ready and you’re all set. You will need a top-notch information memorandum (IM) that you hand over to investors after your knock-out pitch.

A confidential information memorandum is a short document outlining your business plan. Usually running for 20 to 30 pages, your IM includes projections, analysis and explanation that you could use to pitch to your investors without boring them to death.

Here are some essential aspects to cover in your information memorandum.

Financials
Be sure to include critical financials supported by explanations and pricing strategies. Include comments and notes where necessary.

Lease and Rental Terms
What are the lease and rental terms? What is included? Are storage, car parking and outgoings included in the lease contract? What is the rent and what are the payables? What’s the GST component? If there are any unique aspects or improvements that are required in the office space, be sure to mention the same. 

Equipment 
What sort of equipment will you require, whether you will buy the equipment, hire them or procure them on a lease? You might want to include comments for plants that are unique or are an integral part of the business. 

Payment Terms
Do you have any special arrangements, deals and payment terms with your vendors? You can include information such as how do the orders will be placed, the frequency and why you have chosen the particular vendors. 

Marketing
How would the business generate sales? Would you set up brick and mortar stores, an online store or would you distribute the products to merchants? What sort of marketing strategy will be in place? 

CRM
What sort of CRM or database do you have and why? What does this system offer? Is it owned or licensed? How does this software help manage your business?

Staff
Provide in-depth information about the staff, the number of people working, the staffing structure, the remuneration and the pay structure. The owner’s involvement plays a crucial aspect as the investors might want to identify how they might fit into the business. It is critical to demonstrate the owner’s role and how his role can be replicated or handled during the transition phase. If you can demonstrate that the staff is reliable and loyal, it will immensely help selling your business. 

Location
Where is the business located? Who are the target customers of your business? Demographics? Why do you believe this location works in favor of your business? It might be that it’s a street with high footfall, perhaps it’s centrally located or has easy access to car parking. No matter what it is, detail it in the comments. You might provide data about the area, its population and may even include a Google map here. 

In Conclusion
These are some aspects of your information memorandum. The purpose of an information memorandum for investors is to show that investing in your business will be profitable for the investors. Support your statements with facts and figures. 

Are you looking for reliable business plans solution for your new or existing business? Business Plans is one of the leading sources that can provide you with business plans for any kind of business projects. 

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