How to Make a Business Plan for an Existing Business | Bizfluent

 

business plan to buy an existing business

Existing businesses are often more credible to investors because much of the financial data in the business plan has already been proven accurate. Create an outline of the business plan. Include sections on explaining your business, growth strategy, environment and competition, target market and marketing, operations, finances, and an executive summary. Dec 12,  · Here’s what to pay attention to throughout the process, and what to include in your plan going forward, should you decide to buy an existing business. Start with existing information. Start with the information you get from previous owners. Ideally, during the purchasing process, you received a business plan from the previous owners/5(4). Buying an Existing Business – 7 Steps to Success 1. Remember what you’re trying to do. 3. Announce it to the world. 4. Put your team together. 5. Ask questions. 6. Review financial statements. 7. Get down to the brass tacks.


Buy an existing business or franchise


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.

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. You should always have financial information. Question the information sources: copies of tax forms, if they are real, 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 business plan to buy an existing business 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 many 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, business plan to buy an existing business.

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, and balances of capital, debt, and assets. Follow him on Twitter Timberry. Purchasing an Underperforming Business. Finance options for purchasing a small business. You'll want to go in well-informed and well-prepared. Estimating Unknown Expenses Next Article.

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 sellers, proceed with caution.

Make sure you have enough information on the financials You should always have financial information, business plan to buy an existing business. 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 purchasing a strong business with a good past, 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, business plan to buy an existing business.

Consider the name. If you plan to keep the business name, lean business plan to buy an existing business 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.

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7 Steps to Buying an Existing Business

 

business plan to buy an existing business

 

Mar 20,  · A business plan for an established business serves as a roadmap guiding the growth and continued success of your business throughout its next stages. Download our free business plan template for your established business as a Word doc. Nov 25,  · Management and Organization Structure. The management plan should provide background information on the existing management, such as the level of involvement of the previous owner, bios on prospective new owners, and an organizational chart depicting management hierarchy. You should also obtain information on advisory members such as attorneys, accountants or business qusalis.cf: Curtis Kroeker. Buying an Existing Business – 7 Steps to Success 1. Remember what you’re trying to do. 3. Announce it to the world. 4. Put your team together. 5. Ask questions. 6. Review financial statements. 7. Get down to the brass tacks.