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Tag Archives: business planning

Buying a Business Checklist – What you need to know before you buy!

April 17, 2012   LTruex   1 Comment
checklist

Did you know that you can start a business today…right now? While building a business from scratch has its own advantages, buying a business is one of the fastest ways to start working from home. There are many advantages to buying a business including brand recognition, working systems, existing customers, available inventory, and support and training. Nevertheless, buying a business also comes with potential problems and issues such as costs, risks, and sometimes limited control such as when buying a franchise.

There are four different ways to buy a business:

1) Buy an existing business that was started from scratch by someone else.

2) Buy a franchise.

3) Buy business opportunity

4) Buy into a direct sales company

All offer a host of advantages and disadvantages, so before signing a contract and paying your money, do your research and get answers to the following questions.

Buying a Business Checklist

Below are a set of questions you should answer before buying a business whether its an existing business, franchise, biz op or direct sales. This is a generic checklist. You can get business type specific check lists such as Franchise Buying Checklist in The Work-At-Home Success Bible.

  1. Who is the seller/company? Did he/she start the business and if not, who did?
  2. How long has the business been in existence? How long has the seller owned it?
  3. Why is it for sale?
  4. What is the price? How was the price determined?
  5. What does the price include?
  6. Is there inventory? What is its value?
  7. Are there any equipment or materials included in the sale?
  8. Does the purchase include ownership or use of logos and the brand?
  9. Is a customer database included? What is the size and purchase history?
  10. Does intellectual property rights convey with the sale (trademarkes, patents, copyrights)?
  11. Will the seller provide training and support?
  12. What is the current financial state of the business? Debs? Assets? Accounts receivable?
  13. Does the business/seller have contracts with specific ventors/contractors and will those relationships transfer to you?
  14. Is the business required to operate under any laws, franchise or license rules, or other agreements?
  15. What is the history and track record? What are the last two years of sales and returns?
  16. What current marketing campaigns are running?
  17. What is the reputation of the business?
  18. What is the quality of customer service?

What is crucial to know is what EXACTLY are you getting for your money. If you buy a business but the sale doesn’t include the brand or customer database, you actually aren’t buying very much. You also want to make sure you’re not buying a business that is on the verge of bankruptcy. Finally you want to know what laws or legal obligations the business is required to work under or uphold.

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Planning Your Home Business

April 02, 2012   LTruex   2 Comments

Having a business plan is crucial to your business’s success. While it can be used to secure funding for your venture, it can also provide you with direction and focus in guiding your business to success. Business plans vary in complexity depending on whether or not it will be used to ask for funding or solely as a course of action. Below is the information most experts agree should be in a business plan.

  • Overview Summary: Outline your business idea including the specifics about your product or service and how you’re business will be different from similar businesses.
  • Mission Statement: What is your ultimate goal or purpose to your business?
  • Company Information: Provide information about when your company was founded, what it does, its legal structure, where its located, etc.
  • Product or Service: Describe what you offer, how is it created, how is it unique? Refer to brochures and literature if asking for money.
  • Market: Who are your customers? Where are they located? How will you reach them? What is your marketing plan (advertising, promotion, etc.)?
  • Competition: Who else out there offers what you do? How does your business differ from theirs?
  • Liability/Opportunity: What risks are you facing and how will you overcome them (i.e. financing)? What opportunities are there that you can take advantage of?
  • Management: Who is involved in your business and what is their experience? Be sure to include yourself.
  • Capital Requirements: Even if you aren’t asking for money to fund your venture, you should have information regarding start-up expenses. Often starting a business cost more than anticipated because there are more fees and small expenses than expected.
  • Financial Plan: This includes income statements, cash flow and break-even analysis, balance sheet summary and sales summary. Indicate your projected expenses and income for the next year.
  • Appendices: This is where your supplemental information goes such as literature, brochures, charts, contracts and anything else to illustrate points in your plan.

Even if you aren’t planning to ask for funding, it is important to put in writing information about your business, how you plan to market it, fund it, and your vision for it! The Small Business Administration has a lot of great information on writing a business plan and other business start up tips.

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