Thread by @SBA_Matthias

Buying a business is a very difficult undertaking.

There is a reason that few people do it that consider it.

One of the critical items when it comes to the financing process is having a well written business plan. In this thread, I will cover what one looks like.

1/x: As the buyer of a small to medium sized business (SMB), you are the new variable that is getting introduced to the equation when it comes a business acqusition.

2/x: From a lender's perspective, this creates a risk. The seller's business is currently running at status quo. As a buyer, one of 2 outcomes will happen: You improve things, or you end up running the business into the ground.

3/x: Think of a business plan as your playback.

In the same way that an NFL coach doesn't head to the sideline if the superbowl without plays to call, as the buyer of an SMB, you need a game plan for how you're going to go in and run your SMB post acquisition

4/x: The Organizational Chart & Goals

➡️ Find out the current responsibilities of each employee at the company that you are intending to buy

➡️ Make a determination if the business is operating optimally based on the current delegation of duties across the organization chart

4/x: The Organizational Chart (continued)

➡️ Spell out within your business plan how things are being delegated now, if you plan to keep the tasks allocated how they currently are (why), and if you plan to make changes, what the reasoning is

5/x: Competition Analysis

➡️ Every company has competition. Think about Nike and Adidas. Your SMB will be no different.

➡️ Let's say that you're buying a landscaping company. Will you compete on price, level of service / quality? How. Spell it out and make it clear for the bank

6/x: Sales and Marketing Strategy

➡️ Do a deep dive to determine what the seller is currently doing for sales and marketing.

➡️ Website: Built in 1990s? A face-lift is needed...

Focus on both quick improvements (website & SEO), and also long term improvements

7/x: What is it that you as the owner will be doing?

➡️ This is the section of the business plan where you can really shine.

➡️ Be as specific as possible and make it easy for the lender to understand your value-add to the company being purchased

7/x (cont).

➡️ Afterall, if anyone could buy this business, why are you the right person?

➡️ In funding an acquisition loan for your business, your lender is essentially taking a calculated bet on not only the business, but also you as the owner. Let them know why they should

If you found this thread useful, please feel welcome to like or re-Tweet.

#sba #smb #acquisitions #entrepreneurs

If you enjoyed this thread and are currently in the process of buying an SMB and would like to connect to discuss financing options, please feel welcome to put a time on my calendar to connect 👇

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