Look into how the business is currently handling customer service. This will help you serve these customers if you choose to purchase the company. What does it do to draw new customers or clients? Find out the present marketing strategy and start thinking of new ways to reach its target market. Would the knowledge of new ownership please or displease the current customers? Make sure you're purchasing a profitable business. The financial documents will show you the growth and loss within the business and may help you decide whether not to buy.
If you need help, consult with an accountant. It's always a good idea to get the advice of your attorney. Professional legal advice can help guide you in the right direction. Your attorney and accountant can be a great team to help you decide on the right business to purchase.
In your business plan you will need to evaluate the typical end users within the market segments you are targeting. There are countless variables to consider when analyzing consumer behavior. Try to focus on behavioral possibilities that will best determine how viable your product will be in your target markets. Identify the market leader and define what makes it successful. Emphasize the characteristics of the firm or offerings that are different than yours.
You should also make an attempt to identify any firms that are likely to enter the market or are in the process of developing products or services that will be competitive with those you are offering.
You briefly described the key features of your product or service in the concept section of the plan. In this section you should explore features and benefits in depth. It is essential not only to be clear about the distinguishing features of your product or service but also to delineate any strong consumer benefits. What makes your product or service significantly better than competitive offerings? In this section you need to do an in-depth analysis of the competitive advantages and weaknesses of your firm.
When exploring weaknesses you should include information that will help allay any concerns that may arise as to their ability to significantly hinder your success. This section is important, especially if your company is a start-up, because you will, typically, be competing with established companies that have inherent advantages, such as financial strength, name recognition, and established distribution channels. Positioning can be thought of as a marketing strategy for your product or service.
Positioning defines how you are going to portray your product to your target market. Your first step is deciding who your target market will be. It will consist of potential customers toward whom you will direct most of your marketing efforts. Often this group will not be the sole or even the largest market for your product, but it will be the market that, based on competitive factors and product benefits, you feel you can most effectively reach.
Start-ups are more likely to be successful if they focus on a highly specific, very narrow target market. General markets are usually dominated by large, well-established firms. Small businesses should focus on highly specific niches to avoid competing against large, well established companies. Once you have determined who your target market is, you need to decide how you want consumers to perceive your product.
If you have a one-product or -service company, your marketing strategy may coincide with your overall business strategy. Use this section to provide an overview of your general promotional plan. Give a break-out of what methods and media you intend to use and why. I offer a specific presentation on unique selling propositions.
How to Choose the Right Advertising Media. Make sure that your advertising, publicity, and promotional programs sound realistic based on your proposed marketing budget.
Effective advertising, generally, relies on message repetition in order to motivate consumers to make a purchase. If you are on a limited budget, it is better to reach fewer, more likely prospects, more often, than too many people occasionally.
For example, if your start-up company is planning on selling products to other businesses in a highly competitive marketplace, your market entry will be easier if you rely on wholesalers or commissioned sales representatives who already have an established presence and reputation in the marketplace. If your business will be selling high-tech products with a range of customized options, your sales force needs to be extremely knowledgeable and personable.
A discussion of research and development is, obviously, not germane to all companies. If it applies, though, financiers are going to want to know that research and development projects are aimed at specific, realistic objectives. Remember that banks generally lend money to businesses on a short-term basis, and venture capitalists and other first-round investors generally want to cash out in just a few years. If the start-up is a manufacturing concern, discuss critical elements of the manufacturing process.
For retail businesses, discuss store operations. Wholesalers should discuss warehouse operations. In addition to discussing areas that are critical to operations, briefly summarize how major business functions will be carried out and how certain functions may run more effectively than those of your competitors.
The focus here is key people and positions. Primary attention should be on key people who have already committed to joining the firm. Elaborate on their relevant past experience and successes and explain what areas of responsibility they will have in the new company. Resumes should be included here as part of an appendix or exhibits addendum at the end of the plan. If members will have an active role in running the business, elaborate that role here. If consultants have been engaged for key responsibilities, include a description of their backgrounds and functions.
Fill as many of your key positions as possible before you seek funding. Many financiers reject plans if the management team is incomplete. Both debt and equity lenders will want to know how they can expect to receive their investment back and realize interest or profit from the company. Most private investors and venture capitalists will want to be able to exercise a cash-out option within five years. They will be concerned that, even if the company becomes highly profitable, it may be difficult for them to sell out their share at an attractive price.
This concern is particularly true in the case of minority stakeholders. This is why you must provide an exit strategy for investors. Ideally, investors hope a firm will become so successful that it will be able to go public within five years and their shares will become highly liquid investments, trading at a hefty multiple of earnings.
But, often, a more realistic goal is to make the company large and successful enough to sell to a larger firm. State what your exit plan is and make sure it seems realistic. Existing businesses should also show historical financial statements.
How far into the future you need to project and the number of possible scenarios you can anticipate depend on the complexity of the business. Three to five years for financial projections and three scenarios are typical for a start-up business seeking angel investors. Scenarios should be based on the most likely course your business will take, a weak scenario with sales coming in well under expectation, and a good scenario with projected sales well over expectation.
Pro forma income statements should show sales, cost of operations, and profits on both a monthly and an annual basis for each plan year. For all but the largest businesses, annual pro forma balance sheets are all that are necessary.
Business acquisitions, franchise purchases and newly developed products are just some of the events that might prompt an existing business to create a business plan. Existing businesses use the business plan to monitor their expenses, define their strategies and benchmark their progress.
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Jul 11, · To write a business plan for a small business, start by writing an executive summary that briefly outlines your business. Follow that with a company description that explains your business in more detail. You'll also want to include sections on your target customers, how your business will be structured, and what products or services you 89%(). Dec 12, · Plan for a new business or an existing one? 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/5(4).
Jan 20, · To write a business plan, start with an executive summary that lays out your grand vision for your business. Follow that with a section that describes what products and services your company will offer%(22). Oct 23, · Buying and Selling a Business; Non Profit Organizations; Home-Based Businesses; Law and Taxes; How to Write a Business Plan [Updated for ] by: Noah Parsons planning. This article is If you are writing a business plan for an existing company, it’s appropriate to include a brief history of the company and /5().