Finance First
At Silvan Ridge Business Advisers, we like to use the phrase ‘finance first’ with prospective business buyers. All the planning, knowledge and experience is worthless if you can’t get funding to buy the business. From a bank’s perspective, they are taking a risk by investing in you so you need to prove the business will work. Your business plan including a cash flow budget and marketing plan must convince them the business is a worthy investment.
Your bank or financier will generally require financial statements for the last three years to ascertain the level of profitability, value of the business and your ability to service the borrowings. The financials will also help identify any financial trends and serve as the starting point for your cash flow budget. Your challenge is to produce strategies that can improve the bottom line. What new marketing initiatives will you introduce and include as part of your marketing plan? Will you introduce social media, give the business website a makeover, re–brand or simply increase prices?
For assistance in obtaining finance for the purchase of a business contact davidp@silvanridge.com.au