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How to write business plan for existing business

I am wanting to purchase an existing child care center, but I need help on starting the business plan. I need the operating costs, wages, etc, to incorporate into my plan. Should I contact the broker who has the child care center for sale or get an attorney to obtain this information?

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The BAF Group LLC
MD

Neither.

An attorny would charge an arm and a leg, and only do what you would do anyway. Attorneys know the law - we love attorneys - we use them religiously! I am not knocking attorneys. But they don't necessarily know any more about business than you. If you needed a pumber, would you call an attorney? Then why would you call one for this kind of information, which is beyond his training and daily experience?

The average Broker won't know anything more than what the Seller tells him/her. And besides, you do not want to ask that kind of information from the person that is selling you the business. The Broker should be giving you information about THAT PARTICULAR BUSINESS' financial condition, including the Tax Returns on THAT PARTICULAR BUSINESS. But rely on him/her for nothing else, in that regard. He/she represents the Seller (as you explained his/her position) and is not protecting your interests, in any way. You should take the information he/she gives you about THAT PARTICULAR BUSINESS and compare/contrast it to local, regional and national averages. That is part of the basis for your Business Plan.

We consult to help people write Business Plans; however, WE DO NOT DO THE RESEARCH! If we did the research, formatted the Business Plan and simply gave it to the Buyer, 99.9% of Buyers would simply hand it to a lender, without ever looking at the material.

The point of writing a Business Plan is not just to get a loan. It is specifically for you to learn about the Industry in general, and the Business you are looking to start or buy, itself! You learn nothing if everyone else just hands you stuff. The Business Plan should tell you whether the industry is growing, lessening or remaining the same; it should tell you whether it is better to buy or start one up, yourself; it should tell you whether this business is above or below the norm, and therefore whether it is a good buy, and at what price.

To get the information, look for trade associations, State and Federal studies, know the regulations and what may be coming up in new regulatory initiatives, talk to ex-owners and learn about the information from the beginning. Yes, it will take time. Yes, you may lose this opportunity. But that is one hell of a lot better than getting the information errantly, and losing everything you own by making a big mistake.

If we can answer general questions, feel free to contact us.

Jan 24, 2010

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