From the Information Memorandum to the Bank Business Plan, Audience Matters

There are a number of common business documents from the bank business plan to the confidential Information Memorandum. Each have their own unique purpose and speak to a specific audience. Each also have their own structure and expected contents. In all these factors that set them apart, perhaps the most important is audience.

All Business Documents Are the Same

Obviously, all documents are not the same when you get into the details. Our two prime examples here, the bank business plan and the information memorandum, are two very different documents. Yet at the end of the day, they both aim to do the same thing: sell the business.

In the case of the bank business plan, its to sell it in the sense of convincing the bank to issue a loan. When it comes to the information memorandum, to sell is more literal. In either case, it ultimately comes down to the same thing. This is true of any business document including pitch decks, executive summaries, and beyond.

Knowing Your Business Documents

In order to understand the comparison, it is important to understand the two primary examples. A Bank Business Plan, as the name implies, is a business plan meant to be presented to a bank, usually to secure a loan. It will include all the elements of a traditional business plan, starting with an executive summary and ending with financial projections.

The purpose of the information memorandum is less obvious, though the structure is very similar. An information memorandum is a document used in mergers and acquisitions to prepare a business for sale. It is primarily a marketing document used to attract potential buyers. Although many of the sections are the same as a bank business plan, these documents will differ significantly.

Why the Audience Matters Most

The reason the bank business plan and the information memorandum will differ so drastically – despite having similar sections and a comparable layout - is because they are prepared for different audiences. The audience should be central to your thought process when preparing any business document. While the fundamental aspects of your document will not change, the way it is presented and what is emphasized will.

The best way to make this case is to use the financial section of these two documents as an example. Let’s say in some strange instance the same exact business is looking to possibly sell while also pursuing a bank loan to keep the business going in case they can’t sell. In both the bank Business Plan and the information memorandum, the historical financial information will be exactly the same. However, how it is presented will change.

The reason? Because in the bank business plan the audience is mainly concerned with whether or not you have cash flow management practices that will allow you to pay your loan on time. They are not overly concerned with how profitable you are or what your business’s worth may be in one, three, or five years.

It’s quite the opposite when it comes to the Information Memorandum. Most potential buyers will want to see the potential for a healthy return on investment. They will be far more interested in your overall revenue and profits and growth potential.

Conclusion

Regardless of what business document you are putting together, you should draft every section with your audience in mind. At the end of the day, most business documents are quite similar. What will really set them apart, is who they are intended to be shown to and what matters most to that audience.