Business plan buying an existing business

Business plan buying an existing business

A business plan is normally essential to the process of purchasing a business. A good business plan always defines the business’ specific mission and objectives, new ownership, sales focus, market, strategy, management team, and financials. This is particularly important when you are purchasing an existing business, because there is so much uncertainty blogger.comted Reading Time: 6 mins The Legal Aspects of Buying a Business Lien –creditors’ claims against an asset. Bulk transfer –protects business buyer from the claims unpaid creditors might have against a company’s assets. Contract assignment –buyer’s ability to assume rights under seller’s existing blogger.com Size: KB Business plan for existing business purchase. Identify any strategies or steps that your business has taken to overcome disadvantages in business plan for existing business purchase products. Learn about marketing, sales, importing, exporting, and using the web well

Business plan for existing business purchase

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 business plan buying an existing business. 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 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, business plan buying an existing business, 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.

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. Average rating 4.

Business plan buying an existing business count: 8, business plan buying an existing business.

No votes so far! Be the first to rate this post. 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 sellers, 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 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. Consider the name. If you plan to 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.

Was this article helpful? Tim Berry. Starting or Growing a Business? Check out these Offerings, business plan buying an existing business. Outpost Boost team productivity and collaboration with a shared email inbox Start For Free 14 days free. Liked this article? Try these:. Buying business plan buying an existing business 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. Get the Bplans business plan buying an existing business Expert business tips and advice delivered weekly. Plan, fund, and grow your business. Plan, fund, and grow your business Easily write a business plan, secure funding, and gain insights. Start your plan.

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How to Buy An Existing Business: Step-By-Step Guide | blogger.com

The Legal Aspects of Buying a Business Lien –creditors’ claims against an asset. Bulk transfer –protects business buyer from the claims unpaid creditors might have against a company’s assets. Contract assignment –buyer’s ability to assume rights under seller’s existing blogger.com Size: KB Business plan for existing business purchase. Identify any strategies or steps that your business has taken to overcome disadvantages in business plan for existing business purchase products. Learn about marketing, sales, importing, exporting, and using the web well A business plan is normally essential to the process of purchasing a business. A good business plan always defines the business’ specific mission and objectives, new ownership, sales focus, market, strategy, management team, and financials. This is particularly important when you are purchasing an existing business, because there is so much uncertainty blogger.comted Reading Time: 6 mins