Putting Together an Effective Business Plan
When you are going to buy a business, it’s important that you understand how a business plan works. There are many people that before they bought a business had never created a business plan. At VR, we will educate you on formulating one when you come in for a consultation. When discussing one of the business opportunities that we have available, you will discover that many already have an existing one in place. This will give you a solid foundation to work from, where you can either continue to follow, revise or change completely.
Usually, the only time that most small to mid-sized business owners write up a business plan is when they’re looking to obtain financing. Most lenders will want to review a business plan before they consider approval for a loan.
Every VR business intermediary will advise how critical having a business plan is in order to be a successful owner when the purchase is complete. Some brokers argue that you can be successful without a written plan in place. However, in most cases, this is where business owners can fail miserably.
When you are looking into buying a business, you need to prepare not only for how you are going to continue running the operation. You must look at how you are going grow your business. For example, you need to know how much working capital will be required to keep the electricity on, employees working and market to new customers.
Financing Your Purchase and Expansion Plans
VR will help you look at several options on how to finance growth for the business that you are buying as you put together a plan. Since expanding the business is in your best interest, the major risk to overcome here is the short-term cash flow problem – how it can be managed and controlled to avoid risk. In order to discover how much additional cash will be needed to finance growth for the business that you are buying, you will need to draw some projections.
VR will assist you in determining:
What is going to be the timing of the cash flow;
How much money is going in, out and when will it be;
We will have you consider numerous factors to have the best plan in place. You will look at different variables, so you can create several sets of projections. You will need to examine whether you should seek outside financing, if seller financing is being offered, look at venture capital as well as other options.
Examining Your Financial Options
Most people don’t realize it but bank financing is only one option for assisting in buying and growing an existing business. There are many other options that are available, and you will want to keep your current cash and bank credit lines available for other business needs.
Some of the options available for financing the buying and expansion of a business include:
Utilizing a credit line;
Liquidating investments and assets;
Speak to a VR business intermediary today about buying a business in your local area, and the financing that’s available.