We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co

Help with Business Plan

jrpbucksjrpbucks subscriber Posts: 2
edited May 2007 in Business Planning
I have been reviewing business plans and preparing to write one, but have many questions.  I am trying to purchase a restaurant/bar/billiards.  My first question is when you are looking at purchasing a business that has already been running do you include past financial figures in an analysis?  If so, how far should you go back, 3 years?  Also, and this is the big one, how do you do this in the case that there is "two sets of books?"


  • MNGrillGuyMNGrillGuy subscriber Posts: 2 Member
    Your analysis and projections should be based on realistic numbers.  It`s your duty to dig into all the numbers and see if they are legitimate.  If not, you need to make them so for your analysis.
  • jrpbucksjrpbucks subscriber Posts: 2
    He has told me what the real numbers basically are for sales.  For example, he stated he had $35k in beverage sales that he did not report.  So for my analysis should I use this number as opposed to what his books say?
  • MNGrillGuyMNGrillGuy subscriber Posts: 2 Member
    I`d like a clause in the contract that provides a purchase price based on minimum sales #`s in the next 12 months.  Maybe have him involved for the first year or two to smooth the transition....and hold him to those numbers that are not on the books.  If the sales don`t show up, then you pay less for the business.  Else you are taking his word on it.  Not a good position.
  • jrpbucksjrpbucks subscriber Posts: 2
    I agree and that is definately something I would consider.  However what about when I am writing my business plan?  Should I including past revenue and costs and things?  How long should I go back?  If I do include the info, should I use the numbers in his books, or what the estimated correct numbers were?
  • MNGrillGuyMNGrillGuy subscriber Posts: 2 Member
    I think it would be informative to show 3 yrs of past numbers, 5 years of projections.  Use actual numbers for the past 3 years.  The are what they are.  Then use what you think it most likely for projections (minus all changes you may want to make).  As a buyer I`m gonna want very conservative sales numbers.  Lower the better.  I wouldn`t count on anything that hasn`t been on the books in the prior 3 years.  Most certainly do not indicate how you would improve sales or cut costs.  Don`t pay him for all the good things you plan to do.  Just show your 4% ramp and value the business based on those numbers.
  • MNGrillGuyMNGrillGuy subscriber Posts: 2 Member
    Oh, if I wasn`t clear, you`d want different projections to show investors.  Those will be rosier.  So, if the BP is only for investors, then make it rosy (sell your fix-it-up story).  If you are negotiating with the seller, low-ball the projections to show a lower value.
Sign In or Register to comment.