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A business plan is critical to the success of any business. And, if the plan is frequently reviewed and updated, it becomes increasingly valuable over time. It provides valuable historical information to help a business owner make decisions on the future direction of the company. Effective business planning will enable the owner to both maximize profits and maximize the value of the company. If the exit strategy of the owner is to sell the business, effective business planning during the life of the business will contribute to successfully selling the business at the best possible price.

The information included in a business plan is also of great interest to a prospective buyer who is evaluating the business as a possible acquisition. Some of the major business areas that should be included in a business plan that would also be of interest to a buyer include the following:

• Mission Statement and Company Philosophy
• Company History
• Short term and long term revenue and profit goals
• Organizational structure
• Current Organization
• Organizational growth plan
• Employee development
• Marketing
• Target market
• Major accounts and\or markets
• Sales and marketing strategies
• Competition
• Operations
• Current processes
• Planned and proposed changes to operations
• Product and\or service lines
• Documented history of key successes and failures during the life of the business

Complete and accurate books and records are essential for the successful sale of any business. Typically, a buyer’s first exposure to the confidential details of a business comes in the form of a comprehensive document covering the financial and operational aspects of the business. Presenting buyers with the details contained in a good business plan will make a great first impression and can shorten the time it takes to close the sale. Providing buyers with extensive details upfront can shorten the buyer’s evaluation and due diligence process.

The growth potential of a business is usually a huge factor in a buyer’s decision to acquire that business. Potential can be difficult to prove, but a well-documented business plan can give a buyer a comfortable level of understanding about the potential opportunities and challenges for the business in the future.

A business owner’s claims about potential are sometimes discounted by buyers unless those claims are supported by the type of in-depth historical and current data that is included in a good business plan. A business plan not only helps to prove potential. It also provides the buyer with several ideas on a possible road map on how to achieve that potential.

Simon Paine is the Managing Partner & a Business Broker at Murphy Business Sales – Charlotte. If you are thinking of Buying or Selling a Business, or just interested in a chat about exit planning and the business transaction process – Call on (704)-804-5071 or email s.*****@mu************.com

You can find more articles and advice  at murphybusiness.com/charlotte

Murphy Business Sales – Charlotte also serves Harrisburg, Gastonia, Concord, Huntersville, Mt. Holly, Clover, Pineville, Matthews, Indian Trail, Rock Hill, and Monroe.