As we have discussed in previous blog posts, it isn’t just start-ups that need a business plan (see “Writing A Business Plan For An Existing Company” and “Do You Need A Business Plan If You’re Already A Success?”). If you are buying an existing business that someone else has already built up, it’s still a good idea to write a business plan, whether it’s to secure funding or to plan how you are going to take the business forward. The business might not be new, but you are new to the business.
Secure Funding For Purchasing the Business
Writing a business plan could help you to secure funding for purchasing the business you have your eye on. If you have a clear idea of what you are going to do once you own the business and how you are going to keep it profitable and improve it, you can demonstrate this through your business plan and impress investors. Where possible, you should use facts and figures to back up your plans – which brings us onto our next point.
Use the Business’s Historical Data
If you are buying an existing business, you have a good advantage when it comes to writing your business plan because unlike building a new start-up from scratch, you already have information to work with. Depending on how long the business has been running, you could have many years’ worth of financial information, sales records and other data to help you make realistic projections and decisions about the future.
You may be able to look at the seller’s business plan and consider whether the original plans marry up with your own goals and how you could improve on them or use them to guide you. However, bear in mind that the seller might have written a business plan in order to sell the business, rather than manage it. Make sure that the information in the business plan rings true when compared with financial information and other historical data. Are the seller’s growth projections realistic?
What to Include In Your Business Plan
The information you glean from the seller will help you to write your business plan. For example, why is the business up for sale? The reasons might be important to your SWOT analysis, helping you to learn what the business’s weaknesses are, the challenges it faces and where it may need to improve. What problems has the business run into in the past and how were they overcome? What information can you get from outside sources to help you build up a better picture of the business and the market it operates in, and how can this help you to plan your finances, selling and marketing activities?
If you would like any help with writing a business plan for a business you are going to purchase (or have already purchased), we’ll be happy to help. Contact cbm using the form on the right or call 01604 420 420.