3 Reasons Why Market Research is Important for an Information Memorandum

What is an Information Memorandum, and why do you need it? An Information memorandum, also known as an offering or sales memorandum, is a document primarily made for potential acquirers or investors. It describes what type of transactions you would like to have with an investor – how much of your business you are selling and what the audience will gain for their investment.

An information memorandum is similar to a business plan but more transactional. This document is necessary if you want to invite investments or outright sell your business. Market Research represents the activity of gathering information about the customers using your product or service.

One way to gather information is by directly contacting the customer through interviews, online surveys, and questionnaires. Market research is also crucial when it comes to your competitors. You need to know who your competition is and how well they operate their business.

Here are 3 reasons why market research is important for an information memorandum.

Information

Market research is important for gaining information about your competitors and industry which can affect your future Financial Projections. If you are a business owner, you probably consider yourself a hands-on type of person. You may also think that you are well aware of the business industry your company is in, and that you know the market.

Unfortunately, in most businesses, that is not the case. No matter how much a business owner knows about the market, it may not be enough. When it comes to any market, it changes and evolves all the time. Novelties and new trends can appear in any industry daily, and you have to keep track of the changes.

Business Strategies

When you gather information from your Market Research, it is logical that you will use it in a certain way. This information will help you make vital decisions for your business.

For example, if you see that the price of a product or service skyrocketed, you will likely also raise the price of that specific product or service. Or, for instance, if market research shows that customers are interested in a new product that your company does not have, what will you do? Market research will help you create new or change old business strategies. That way, when reading your information memorandum, investors could see a financial potential with your company.

Challenges

Like any other business, even yours has some challenges. Market research will help identify your challenges and weaknesses and detect the source of them. When you manage to notice and acknowledge the challenges of your company, you can address them.

Turning your weaknesses into opportunities and strengths is a selling point to the investors. Your business will look more attractive if you present how you overcame challenges and made the best outcome out of the situation. Conducting market research will secure you with potential investors in no time.

Composing a perfect information memorandum requires professional assistance. The right team will gladly help with creating an impeccable Information Memorandum for your company.