Update or Create a Business Plan

Creating a business plan is often done to obtain financing for startups; most people assume this is the sole role of a business plan. But a business plan can be an extremely helpful document throughout the succession planning and business sale processes. As an advisor, you may want to talk to your client about this and perhaps even help create the plan.

Creating a business plan will force your client to look at all aspects of the business so that he sees which areas need to be addressed to make it highly attractive to buyers. A business plan will also provide a guide to keep him on track when implementing value enhancement strategies.

A business plan will not only improve a business, it will enhance its value in the buyers’ eyes. A business plan will:

Benefits Of A Business Plan

  • Clearly define the business’s vision, mission, and values. This helps potential buyers understand the culture of the business. If they see a similarity to their own culture, they know that culture clash (a major reason for unsuccessful mergers and acquisitions) will be minimized.
  • Demonstrate that the business is run professionally. Having a business plan shows that your client is serious about planning and about following the plan to create better, more consistent results.
  • Help your client understand the strengths and weaknesses in the business so he can address weaknesses and build on strengths.
  • Show that your client creates plans for growth and investigates new opportunities for the business. When buyers see commitment to growth and a plan to carry it out, their optimism rises.
  • Provide the bulk of the information that potential buyers need to decide how they want to proceed. If your client doesn’t have a plan, he will spend more time later gathering all the info required by the M&A advisor to prepare the Confidential Information Memorandum.

If you don’t have any experience creating a business plan, you may want to advise your client to consider hiring a consultant. If your client decides to create a business plan on his own, he should commit to making it as comprehensive as possible and give this important document the time and attention required to make it a useful tool.

Business Plan Outline

  • Company Description
  • Mission and Vision
  • Positioning Statement
  • Description of Products And Services
  • Management Summary
  • SWOT Analysis
  • Market Analysis Summary
  • Industry Analysis Summary
  • Financial Plan
  • Value Enhancement Plans
  • Sales and Marketing Strategy
  • Growth Strategy