Acquisitions and Franchise Opportunities

April 13, 2006

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If you're considering acquiring an existing business, how do you know how much to pay? Will the business provide you with the income you need three years down the road? A business plan is the perfect tool to use when you assess whether you should buy a business or let the opportunity go by. In fact, many sellers will create a selling memorandum, which is really a business plan in reverse, to fully acquaint you with their business and convince you that the opportunity is a good one. You can use this as a starting point for creating your own plan for the future.

Similarly, deciding whether to purchase a franchise is a serious issue. By becoming a franchisee, you agree to conform to a wide variety of requirements whose nature and extent will depend on the particular franchise you acquire. A business plan provides the framework for considering whether the benefits of holding a franchise outweigh the associated costs and restrictions. The plan is the perfect tool for modeling how your business will perform as a member of the franchise. If you're already operating as an unaffiliated business, you can compare your current operations to the costs and opportunities presented by joining the franchisor.