Business Plan Template – Loans For Buying A Business

I’m a big advocate in the creation of a
business plan prior to the purchase of a business, and here’s why. The creation of
a business plan serves two purposes, 1. it forces you to look at every aspect of
the business you’re looking to buy. 2. in the likely event you need financing
from a lender in order to buy the business a quality business plan can
make the difference between you getting alone, or getting declined for a loan. So
let’s talk about business plans as it relates to buying a business. The beauty of creating a business plan, as itrelates to buying a business, is that a lot of information will come from the existing business owner. Let me explain… All the high level details you need, should be in the initial information package you receive once you sign a Confidentiality Agreement. Assuming the business is of interest to
you, you’ll get more details about the business once you meet the business
owner in person and have a tour of the business. It is important to note there
are going to be some highly confidential details about the business you will not
be able to obtain, nor should the business owner be providing you those
details, until you have paid a deposit and you have engaged your lawyer. That being said the information you have
got, up to this point in the process, will be more than sufficient to create a
great business plan, worthy of any lender review. Let’s discuss some essential
information I’d highly recommend you include in the creation of your business
plan. Business Analysis. Part of your business
analysis should be determining what products and/or services are making the
business money. Conversely what products and/or services might be costing the business money. A summary of your findings should be
included in your business plan. Your business analysis should also determine what capacity the business is operating at. Ask the business owner when you meet
them – “How much of an expansion, or increase in revenues, can the business
accommodate, given the size of the real estate, the employee count and available
cash flow?” If for example the business revenues can be increased by 10 percent,
with little to no increase in expenses, reflect this information in your
business plan. Financial Plan. You’re going to have historical financial data in the form of account prepared financial statements which you get in
your initial information package. However, through discussion with the business
owner you must first determine where each dollar is coming from and where
each dollar is going. Understand that with few exceptions business owners
typically do not “Clean Up” their financial statements, prior to listing
their business for sale. This means you’ll very likely find money
within the business, that can be put to better use. Money you should reflect in
your business plan financial projections, for both you and your lender to
reference. That being said be mindful of such things as when each employee last
got a pay raise and when the last product or service price increase
occurred. This is all information that should be reflected in your business
plan. Change in business ownership. Everyone of us have strengths and weaknesses and from a lender’s perspective the lender wants to be assured that when
the current owner of the business leaves, you the buyer, with the help of the
employees, are capable of replacing the owner, with no negative effect on the
operation, or revenues, of the business. Clearly document within your business
plan how you plan to replace the skill set and roll of the current owner. Business location. You need to determine if the location of the business is suitable for conducting the business operations. Ask the business owner what their opinion is on this. Most times there will be no issues at all
with the business location but if there are issues, your business plan needs to
clearly reflect how you intend to correct the problem. Business opportunities. Over the years I’ve found one consistent theme when it comes to
business owners. They all have great business ideas, that they simply had no
time, or desire, to explore. As a buyer this is juicy information! When you meet
the business owner asked them if you were to keep the business, what business
opportunities, or ideas, would you explore? Take Notes! Furthermore, prior to the meeting with
the business owner, take some time to think of a few of your own ideas of
growing the business. When you meet the owner, discuss your ideas with them. Not
only will your proactive approach resonate positively with the business
owner, you may find that business owner tried your idea in the past, and it
didn’t work. They’ll tell you right there and then what the problems were, saving you time and money. Competitor analysis. When you
meet the business owner you should ask about the competition and what differentiates their business,
from the competition. Again take notes and after the meeting, review the competition for yourself and
summarize the details in your business plan. Let’s review and summarize the
discussion. Creating a business plan is an essential activity that ensures
you’re buying the right business opportunity, for the right price. Furthermore, it is essential to
impressing a lender. Business Plan templates can be found online. There are
even some very good business plan advisors that you might want to consult
with. Finally when it comes to creating a business plan, I’d recommend you be
conservative with your numbers, you stick to provable facts and you keep your
business plan super simple. Don’t create a monster. Enjoy the process and share your vision with the reader. As always, if you enjoyed
this vlog, please click the “Like” button and subscribe to my youtube channel by
clicking here. If you’re thinking of buying a business, I encourage you to
visit my website to learn more about my Buying A Business course and how it can
help you. Thank you for watching!

, , , , , , , , , , , , , , , ,

Post navigation

One thought on “Business Plan Template – Loans For Buying A Business

  1. Buy a business for the best possible price, for the best possible Terms and in a way that gives you the greatest probability of success – enrol in Canada’s only Buying A Business course:
    Alternatively for personalized one-on-one consulting, click here:

Leave a Reply

Your email address will not be published. Required fields are marked *