Information Memorandum Case Study June 2018

We are in a privileged position with what we do. We are contacted by a lot of very clever people with great business ideas and concepts. Most of these come to us because they need to develop a business plan and fully flesh out their business model and revenue model.

Many come to us to get an Information Memorandum to gain investment to commercialise or grow their business. Whatever their needs I’m constantly surprised by the ingenuity of people and the advancement of technology that will continually revolutionise our lives.

Recently I was approached by a real go-getter who required an Information Memorandum to gain the investment required to launch his business. He is a trained and practising chiropractor with a number of practices in his business. A few years ago, he saw the potential in developing a fractional advertising model across a mix of media to create an integrated online and offline campaign to address a specific consumer need.

The model is tailored to industries dominated by small businesses who don’t individually possess the resources to access large campaigns and high-traffic media platforms. However, when the costs of large and targeted integrated marketing campaigns are divided among numerous businesses it is accessible. The enquiries are then distributed among the participating businesses in direct proportion to their financial contribution.

The above couple of lines in no way do Steven’s model justice. Steven has automated the management of the process and has other very clever elements and benefits for customers that can result in the business gaining access to the campaigns and leads under a subsidised model that sees them pay very little or even nothing!

The business and revenue models are very well thought out and attractive. Our job was to develop the Information Memorandum to clearly explain how the fractional advertising model across integrated marketing campaigns works and the revenue and profit potential of the model.

Each Information Memorandum has its own informational requirements and challenges. This is where a general template approach fails. We had to ensure the reader understood the concept of what was being proposed, and the variations of the models that were possible. The next step was then to show how this translates into profits and the potential market opportunity for the business.

To assist with this, we developed a full Financial Model in Excel. The model we developed had a Driver’s page that allowed us to change the key revenue and cost assumptions for the business and immediately see the impact on the business. This enabled us to run various scenarios to determine the most profitable strategies for the business and to have a sensitivity analysis with worst and best-case scenarios. We delivered this to Steven to help him in his business in the future.

Steven recently called to tell me the Information Memorandum had done its job and he was in negotiations with an investor. The Information Memorandum must have struck a real chord with the investor as he actually asked Steve what the projected returns would be if he invested more than what was presented in the Information Memorandum.

We went back the Excel Financial Model and I included a feature that allowed the investment field to be a variable and linked the figure to spending in the key areas proportionate to the importance, and then linked it to a formula that calculated the new revenue and profit figures.

I would like to wish Steven all the best in the business and if you want to see a really great business keep an eye out for GroupAd.