Happy holidays! Welcome to the fourth and final part of The 12 Days of Buying a Business. This is a multi-post series covering all 12 tips in combination with a vlog. In case you missed any of my previous tips, links to parts 1, 2, and 3 are below. Today, we will be covering your business plan. To be successful, you need to set goals for your business and you need to document those goals, so you have something to refer back to. This is your business plan.
So far in this series, we’ve covered structuring your deal, getting to know the business, and initial planning. Below are my final three tips for buying a business and nailing down your business plan. For a more in depth look at each of these, watch the video at the bottom of the page.
Tip 10: Create a business plan.
As they say, if you fail to plan, you plan to fail. Take, at a minimum, an afternoon to map out what your business goals are. Collectively, your business goals and vision will create your business plan. This is a tool that will help you shape and fine tune your business. Your business plan will also be important to remind you why you decided to buy this business and hold you accountable to your goals.
Along with your business plan, it is also important to have your business forms dialed in. This includes Employment Agreements and Handbooks. These forms should capture your vision and goals for your business and help shape the culture of your company.
Tip 11: Plan your finances conservatively.
While you are creating your business plan, it is important that you plan your budget conservatively. I always recommend new business owners have 25% reserve at a minimum. So, if the business costs $1,000,000, it is wise to have at least $250,000 as a buffer for your operations. Chances are you’ll need it. Emergency cash can be difficult to come by, and it comes at a huge price.
In addition, you should be preparing for the business in your personal life and reducing your personal expenses. Pay off your credit cards and any other high interest loans. You’ll need every penny to make your business work, not to pay that interest on credit cards.
Lastly, resist the urge to splurge on flashy and completely unnecessary business expenses. For example, hold back on financing that brand new $80,000 work truck until you have a year or two of operations under your belt – especially when a $20,000 work truck can do.
Tip 12: Have fun — You’re your own boss now.
Owning a business can be invigorating. Don’t lose sight of your goals. Don’t lose your sense of self in the business — remember why you started. And have fun! Let your personality melt into the company culture, and enjoy the journey. It will never be easy, but you may just sit back at some point and not imagine having done it any other way.
Watch the video below for more detail on these tips!
This post concludes The 12 Days of Buying a Business. Thank you for tuning into this series! I hope that you have found some nuggets of wisdom in these tips to help you be successful in your future business ventures. Also, these tips are for general guidance. A strong, safe business transaction should include the review of any documentation by an attorney. Give us a call today to schedule a review.
Please reach out to our office with questions or for next steps to make your business dream a reality. We are here to support you and are ready to help you have a good and safe business transaction.
Additionally, if you have suggestions for topics you would like us to cover in our blog or vlog, reach out and let us know! This content is created to be a resource to you, and your input is greatly appreciated.
Halverson Law specializes in Business Law and provides expertise and representation on both transaction and trial work. Negotiating strong contracts and crafting practical legal strategies — it’s what we do. We’re ready to help wherever you are in the process of buying a business, and we’re looking forward to helping you have a good and safe transaction.