Creating a Strong Business Plan
When selling a business, a buyer will want a detailed business plan. While most companies have these, they aren’t usually ready to pass along to a new owner. In ten or fewer pages, a business plan summary can provide key facts that potential buyers want to see. Whether you need to create a new business plan or shrink an existing one, here are the steps to do it.
When selling a business, obtaining a business valuation is the first step. In the valuation process, our business appraisers at Peak Business Valuation use the business plan to understand the ins and outs of the business. For your personal business valuation, please contact us by scheduling a free consultation. We look forward to working with you!
What to Include in a Business Plan
Here is a basic list of things to include in a business plan:
- Business Overview
- Introduction
- Mission statement
- Key products or services
- Business model, goals, objectives
- Business Environment
- Industry overview
- Market area overview
- Customer description
- Competitors, competitor advantage, business advantages
- Business Description
- Products/services offered, operation & marketing overview
- Distribution & customer service overview
- Management & organization overview
- Business Strategy
- Summary of strengths and opportunities
- Strategy for overcoming weaknesses
- Plans for incurring future growth
- Short-term marketing plan
Spotlight Business Strengths
In a business plan, it is important to focus on the strengths of your business. Highlight the benefits to this business and the capabilities it has. Avoid talking negatively as it can detract from the good things. Some business strengths include:
- Recurring revenue
- Quality location
- Good production processes
- Skilled team/training in place
- Upward sales trends
No matter your business’s situation, there will always be ways to highlight the positive. This will detract the buyer from the negatives. It will also encourage them to focus on the strategies in place to improve the company’s overall performance.
Address Weaknesses
While it is important to not focus on problems or weaknesses in the business plan, they still need to be addressed. This can be done strategically so as not to focus on the bad but look towards improvement. This can be included in the Business Strategy section. Do not discuss the problems but discuss the strategies in place to improve such issues. For example, if sales are on a downward trend, show a proposed marketing strategy to be implemented. This shows positive and potential progress.
Outline the Business Model
A business model is how your business makes money. When selling a business, you must understand your company’s business model. Each company’s business model can vary whether it is a small or large company. However your products or services reach a customer, a buyer will want to know.
Refresh Your Marketing Plan
A description of your marketing approach is essential when selling a business. The first reason is marketing brings in sales, which is revenue. A buyer wants to understand your business sale offering. Showing the buyer your marketing plan summary helps provide a picture of the market and what your business has to offer.
Introduce Employee & Operation Policies
When selling a business, the new owner will want an “owners manual”. This manual shows how the business is run from the simplest of things to the most detailed. This is a very attractive piece to a buyer. A detailed owner’s manual discusses expectations of employees, products, services, and day-to-day operations. Even if the business is small, this is still important. If the company wants a chance to grow, it needs an operations manual. Some things it could include are:
- Opening and closing hours and procedures
- Equipment handling and maintenance procedures
- Billing procedures
- Shipping and receiving procedures
- Cash and checkbook handling procedures
- Cost estimate, job order, and processing procedures
- Product production procedures
- Building operations
Summary
Each company is so unique which makes a business plan even more essential. While businesses can follow similar formats, no two are the same. Taking the time to prepare a detailed and organized business plan will greatly benefit you when selling a business. While we just covered the basics, our business appraisers at Peak Business Valuation would love to speak more with you about this business plan. A business plan holds important information when valuing a business. Get started by scheduling a free consultation today!
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