Practice for Sale: Executive Summary or Sale Memorandum

business for sale

This article accompanies the APHA Expert Call-in: Selling Your Advocacy Practice: Considerations and Planning

Prepare this document before you reach out to any potential buyers, and share it with your lawyer, too.  It will clarify for you exactly what you are selling and so you'll be prepared to answer questions.

When you find someone who is interested in discussing a possible sale, you'll share the Basics with them.

Later, with more serious prospects, and when you are closer to a Letter of Intent, you'll share the remaining pieces of the document.

Basics:  To share with all interested parties

  • Business Name, Legal Formation (sole proprietor? LLC? Corporation?), and Location

Location: describe where your clientele reside in addition to where your office is.

  • Proprietor's Name (you!), Credentials, and Contact Information

  • Business Description and History

Description: an overview of what you do, like "Private, independent patient advocate providing services to patients with medical (or medical billing) challenges.  That sort of thing. It will be expanded later in this document.

History:  When did you establish your business?  How many clients have you had in that time?  How many do you have now or how many do you work with in a given year? Those sorts of details.  If there are other aspects to your years in business, mention them, too. (We expanded to 5 advocates in total in 2017, or we began offering these additional services in 2018 - that kind of thing.)

  • Services Offered, Client Descriptions, Value Proposition, and Market Facts

Client descriptions: mention appropriate descriptors such as the elderly, or women, or people with cancer, or people whose medical bills are excessive - whatever distinguishes your clients from other patients.

Value proposition:  This is where you talk about the value of your services to the person who hires someone from your business. Why do they need your services? How is their life improved by contracting with your business?

Market Facts:  In your population of potential clients:  how many fit your description above?  (example:  If you live and work with cancer patients solely in Anytown USA, you might state:  each year, in Anytown and AnyCounty, 20,000 women will be diagnosed with breast cancer. Of them, at least 30% would have the ability and interest to hire an advocate."

  • Reasons for Selling

Retirement? Starting another business?  Leave this out if you're selling because your business is failing or you're burning out. Be prepared to answer the question whether or not you include it in your summary.

If you wish to partner with someone after a sale, this is a good place to include that information so they will understand that you, at least at first, are part of the package.


Save for more serious prospects:

  • Your Competition

Who is your biggest competitor?  What separates you from them?  If you think it makes you look more valuable, describe lesser competition, too.

  • Key Personnel and Operations: 

This is an overview of how you conduct your business. How many people work in your business?  Are they mostly on the road with clients? Do you maintain records on an app (so you can just turn over the password to the buyer?) How is your business, and your advocates and other personnel, insured? Any details about how your business is run will give a potential buyer a sense of the work that needs to be done to get up to speed.

  • Marketing

What do you do to promote your business, and how much does it cost annually?  This is also a good place to mention your website and any appropriate analytics (visitors, unique visitors per month.)

  • Legal Contracts and Applications

What contracts are you using in your business?  A client contract, a guarantor contract, a subcontractor contract, a contractor non-compete, others?

  • Future Planning and Growth Possibilities

What ideas have you had that a buyer might want to undertake to expand the business after purchase?  There is nothing concrete here. This simply gives the buyer an idea of why they might want to partner with you, or ways they can grow after taking over.

  • Financials

This is just a summary of your company's last three years of income and expenses.  If your business is a corporation, mention taxes. Include a statement that states that full financial disclosure will be available upon signatures on an Agreement to Purchase.

  • Offer Price and Terms

Suggest a price or a range*, what is included, and whether or not you are willing to take payments over time.  This is also a good place to expand on the partnership concept.

*Remember - all pricing is simply a suggestion and subject to negotiation. In reality, it will be the buyer who establishes the price, then the two of you upon agreement.

Once this summary is complete, you'll want to share it with your attorney to decide if you have disclosed enough, or too much information, or made statements that should or should not be included.

Learn more about all these pieces of your sales memorandum or sales:

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