Business plan for buying a business

Business plan for buying a business

Apr 23,  · Calculating the ideal size, location, sales, staff and so on of your prospective business is an important step in your plan of buying a business, since it will give you a scale to keep in mind Sep 05,  · Writing the Franchise Business Plan. Opinions expressed by Entrepreneur contributors are their own. One of the most important exercises to go through in Author: Jeff Elgin Sometimes buying an existing business is the best option for a new business ownerEstimated Reading Time: 2 mins

How to prepare a business plan when purchasing a business - The Business Journals

Are you considering purchasing an existing business? A business plan is normally essential to the process of purchasing a business. This is particularly important when you are purchasing an existing business, because there is so much uncertainty involved, business plan for buying a business. Start with the information you get from previous owners.

Ideally, during the purchasing process, you received a business plan from the previous owners. One of the important functions of a plan is to define business prospects, therefore, sophisticated business sellers normally use a business plan as a selling document.

It should contain information about business history, financial history, previous management, and possible prospects. If you do have such a plan provided by the sellers, proceed with caution.

Question the assumptions, business plan for buying a business. You should always have financial information. Question the information sources: copies of tax forms, if they are real, business plan for buying a business, show what the sellers have told the government. Do they match the financial statements coming from the accounting?

How reliable are the financial statements? Have they been audited by outside accountants? Is the seller willing to allow an audit? Compare projected growth to past results. If the seller shows a future much more rosy than the past, ask why? What assumptions justify the change? Why was this business for sale if projections are optimistic? Try to understand why owners are selling a business, and how this affects their willingness to produce real numbers, and how it affects your own possibilities to make this purchased business work for you.

Where possible, spend time at the business in question, talk to customers, eat at the counter, use the service. For retail locations, for example, you can spend some time outside the store, count the customers, see how many go in empty-handed and how business plan for buying a business come out with bags.

Count the business for some sample hours, and then calculate what total sales might be by multiplying your estimated average purchase value per hour. As you plan for the business you purchase, you start by making an important choice: business plans can be either for startup new businesses or for already-existing and ongoing business.

When you buy a business from somebody else, either option is acceptable. This is a choice you make. The main difference between the two options is the existence in the plan of either a startup table, or a past performance table.

In a new business, a startup table establishes opening balances for starting expenses, and financial balances including initial capital, debt, and assets. For an existing business, a past performance table shows past history of profit or loss, business plan for buying a business, and balances of capital, debt, and assets.

Tim Berry is the founder and chairman of Palo Alto Software and Bplans. Follow him on Twitter Timberry. Purchasing an Underperforming Business. Finance options for purchasing a small business. Planning for Purchasing a Business 4 Min. Read Buying and Selling a Business By: Tim Berry. Start with existing information Start with the information you get from previous owners. Proceed with caution If you do have such a plan provided by the business plan for buying a business, proceed with caution.

Make sure you have enough information on the financials You should always have financial information. Use this financial information as a basis of comparison Question the information sources: copies of tax forms, if they are real, show what the sellers have told the government. Growth forecasts are immediately suspect Compare projected growth to past results. Make estimates Count the business for some sample hours, and then calculate what total sales might be by multiplying your estimated average purchase value per hour.

Plan for a new business or an existing one? How to decide? Either way can be acceptable. Here are some suggestions: Consider the status of the business. Does the previous history build your business reputation?

Would a loan or a new investment be more likely based on the previous history, or less? When you are business plan for buying a business a strong business with a good past, business plan for buying a business, use that strength as an asset by developing a plan for an existing business. Develop a plan for an ongoing business, use the past performance table to set your balances, and include a section on company history. Set your startup table for a new business, and treat the business as a new business when you describe its history or lack of historyownership, and strategy.

The better the information available from the sellers, the more advisable that you develop the plan as a plan for an existing business. Consider the name. If you plan business plan for buying a business keep the business name, lean toward a plan for an existing business. The naming decision is often a tip-off to the same variables that affect the plan. The factors that make you want to keep the name will make you want to use past performance and develop a plan for an ongoing business.

Tim Berry. Starting or Growing a Business? Check out these Offerings. Liked this article? Try these:. Buying and Selling a Business Purchasing an Underperforming Business Angelo Meneguzzi. funding Finance options for purchasing a small business Tim Berry.

Buying and Selling a Business Purchasing an Underperforming Business Tim Berry. Back To Top. Claim your limited time offer ».

Buying an Existing Business

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Business Plan for Buying an Existing Business | Wise Business

Business is all about execution, not a concept, and, therefore, if you want your employees, partners, and investors to believe that you are a real business person, you need a solid plan. If you are not sure how to put your ideas into words and what exactly to cover, buying a business plan is a smart choice/5 Mar 20,  · Business plans aren't just for startups. Developing a business plan for an established business serves several purposes: It can help convince investors or lenders to finance your business, persuade a business buyer to purchase your business, or entice partners or key employees to join your company. Most importantly, it serves as a roadmap guiding the growth and continued success of your Apr 23,  · Calculating the ideal size, location, sales, staff and so on of your prospective business is an important step in your plan of buying a business, since it will give you a scale to keep in mind