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Buying an existing business is a great way to enter a new market, expand your product or service offerings, or leverage the seller’s existing customer base and brand recognition. However, before making an offer, you need a clear and realistic acquisition business plan for running and growing the business post-acquisition.
A business plan for buying an existing business is a document that outlines your vision, goals, strategies, and financial projections for the business you want to buy. It is similar to a regular business plan but also includes information about the seller’s business history, performance, strengths, weaknesses, opportunities, and threats.
A business plan for buying an existing business via franchise business planning services helps you to:
- Evaluate the feasibility and profitability of the deal
- Negotiate the best price and terms with the seller
- Secure financing from lenders or investors
- Manage the transition and integration process smoothly
What to Include In an Acquisition Business Plan?
A business plan for purchasing an existing business should cover all the essential aspects of running and growing a business, such as:
- Executive summary
- Company overview
- Industry analysis
- Marketing plan
- Operations plan
- Organization and management
- Financial plan
- Appendix
Why Do You Need a Business Plan Sample for Buying an Existing Business?
A business plan sample can help you write a business plan for buying an existing business by providing a template and examples of how to structure and present your information. A business plan for buying an existing small business can also inspire you with ideas and insights on improving or innovating the existing business.
To help you get started with writing your acquisition business plan template for buying an existing business, we have created a sample based on buying a restaurant for you.
Executive Summary
We are XYZ Restaurant Group, a company that owns and operates several successful restaurants in New York City. We seek to acquire ABC Restaurant, a well-established and popular Italian restaurant in Brooklyn, New York.
For over two decades, ABC has been a mainstay in the community, earning devoted regulars and renown for top-notch cuisine and hospitality. This 100-seat eatery runs at full capacity for lunch and dinner daily. Raking in $1.2 million yearly with $150,000 left over after expenses, ABC shows no signs of slowing down after its longstanding prosperity.
ABC Restaurant is an excellent opportunity to expand our portfolio and enter a new market. We have identified several areas where we can add value and improve the performance of the restaurant, such as:
- Updating menu and dishes
- Enhancing online presence and marketing
- Renovating interior/exterior
- Hiring and training new staff
We estimate the total cost of acquiring and improving ABC will be $500,000. We project that ABC will generate an annual revenue of $1.5 million and a net profit of $200,000 in the first year after the acquisition and grow by 10% annually.
Company Overview
XYZ Restaurant Group owns and whips up several nifty eats-places in the Big Apple. We’re crackerjack at serving out first-rate delicious eats from all over the world, like Mexican, Thai, Indian, and Mediterranean. Folks rave about our mouthwatering chow, friendly service, cozy mood, and fair coin.
Our mission is to dish up a memorable dining experience that delights taste buds and beats hopes. Our vision is to become top cook in the USA, with a diverse and brainy bill of fare for different chowhounds. We value being the cat’s meow, passionate, upright, diverse, and keeping customers cheerful.
We aim to acquire ABC, a swell and popular Italian hub in Brooklyn. ABC has loyal eaters and a dynamite food and service name. We want to buy ABC because it has a potential for growth and bankroll.
Industry Analysis
The restaurant industry in the USA is a large and diverse sector that includes various types of establishments, such as full-service restaurants, fast-food restaurants, cafés, bars, and catering services.
Here are some key stats regarding the restaurant industry in the USA:
- The food service industry might reach $997B in sales in 2023. (Source – National Restaurant Association)
- There are 749,404 restaurants in the United States as of 2023. (Source – Zippa)
- Between April 2022 and March 2023, new business openings in the restaurant industry increased by 10%. (Source – Yelp)
- The US restaurant industry shall grow at a CAGR of 10.2% in 2022 and 2023.
Some of the key trends and drivers that influence the restaurant industry are:
- Consumer preferences
- Technology
- Сompetitor
- Regulations
Our primary competitors in the Italian restaurant segment are:
- DEF – DEF is a casual dining chain that offers a broad menu of Italian dishes at affordable prices.
- Strengths:
- Strong brand recognition
- Diverse menu selection
- Provides good value
- Strengths:
- Weaknesses:
- Menu lacks innovation
- Food quality is inconsistent
- Customer service needs improvement
- Weaknesses:
- Expensive menu prices
- Small capacity limits covers
- Relies heavily on its location
Marketing Plan
Our marketing plan for ABC is based on the following objectives:
- To increase the awareness and recognition of ABC.
- To attract new customers and retain existing customers.
- To increase the sales and profitability of ABC.
Our business plan for buying an established business consists of the following elements:
- Market Segmentation – We have segmented our target market into four groups based on demographic, geographic, psychographic, and behavioral characteristics. These groups are:
- Families
- Professionals
- Millennials
- Seniors
- Positioning and Differentiation – We have positioned ABC as a mid-range Italian restaurant that offers high-quality and authentic cuisine in a comfortable and friendly setting. We have differentiated ABC from our competitors by:
- Updating the menu and introducing new dishes
- Enhancing the online presence and marketing
- Renovating the interior and exterior
- Hiring and training new staff and implementing best practices
- Branding – Our brand name is simple, memorable, and distinctive. Our brand logo is a stylized letter A with a fork and knife on either side. Our brand slogan is “ABC: A Taste of Italy.” Our brand colors are red, white, and green, representing the colors of the Italian flag. Our brand voice is friendly, professional, and authentic.
- Pricing – We have set our prices at a competitive level with our rivals, allowing us to cover our costs and generate a profit. We have also implemented various pricing tactics to increase our sales and profitability, such as:
- Offering discounts and coupons
- Implementing dynamic pricing
- Creating bundle deals
- Providing upselling and cross-selling opportunities
- Distribution Channels – We have chosen the following distribution channels to deliver our products and services to our customers:
- On-premise
- Online
- Catering
- Advertising and Promotion – We have devised an integrated marketing communication plan to promote ABC to our target market through various media channels, such as:
- Online – Search engines, social media, email, and blogs, online reviews, testimonials, and referrals
- Offline – Newspapers, magazines, radio, TV, billboards, print ads, radio spots, TV commercials, outdoor signs, flyers, brochures, and business cards
- Events – Trade shows, festivals, and community events via booths, banners, and samples to display using contests, games, and giveaways
Operations Plan
Our operations plan for ABC is based on the following objectives:
- To provide a safe, clean, and comfortable environment
- To deliver high-quality food and service
- To manage our resources and costs effectively
Our business plan for buying an existing company consists of the following elements:
- Location and Facilities – ABC operates at 123 Main Street, Brooklyn, New York. It is a prime location with high foot traffic, visibility, and accessibility. The restaurant occupies a 2,000-square-foot space, including a dining area, kitchen, storage room, restroom, and office. The dining hall has a capacity of 100 seats and can accommodate up to 150 customers at peak times.
- Suppliers – ABC has established long-term relationships with reliable suppliers who can provide us with fresh and quality ingredients at competitive prices. We have contracts with the following suppliers:
- Food: We buy ingredients from XYZ Food Distributors, a local company specializing in Italian food products.
- Beverages: We buy our beverages from ABC Beverage Company, a national company that offers a wide range of alcoholic and non-alcoholic drinks.
- Other: We buy our other supplies from DEF Supply Store, a regional company that provides various supplies.
- Quality Control – ABC implements strict quality control measures to ensure food safety, service excellence, and overall performance:
- Food Safety – Adhere to all FDA and DOHMH guidelines. Monitor and log temps, freshness. Train staff on protocol.
- Service Excellence – Follow XYZ standards for hiring, training, dress code, incentives, feedback. Address complaints ASAP.
- Performance Evaluation – Track KPIs (sales, costs, satisfaction, retention) with POS, software, spreadsheets. Hold regular reviews to improve.
- Legal and Regulatory Requirements – ABC complies with all relevant federal, state, and local legal and regulatory requirements including:
- Business License from NYS Department of State
- Food Service License from DOHMH
- Liquor License from NYS Liquor Authority
- Health Inspection clearance from DOHMH
- Fire Inspection clearance from NYFD
- Workers’ Compensation Insurance
- Liability Insurance
- Sales Tax registration and remittance with NYS Taxation and Finance
- Passed inspections for health, sanitation, and fire safety standards
- Obtained all necessary permits, licenses, registrations, and insurance
Organization and Management
XYZ Group is a partnership between Alex Smith, Park Smith, and Mark Wood, who own 33.3% and oversee strategy, operations, and technology, respectively.
ABC is a subsidiary operated by the following staff:
- General Manager – Reports to Alex Smith, oversees daily strategic and operational planning services
- Chef – Reports to Park Smith, manages kitchen and food preparation
- Sous Chef – Assists the Chef ensures food quality
- Kitchen Staff – Report to Sous Chef, perform various kitchen duties
- Servers – Report to the General Manager, take orders, and serve customers
- Host – Reports to General Manager, greets and seats guests
- Bartender – Reports to General Manager, prepares and serves drinks
- Delivery Driver – Reports to Mark Wood, delivers orders to customers
We have an experienced, competent team at ABC with proper training, compensation, and a collaborative work culture to drive success. The organizational structure establishes clear roles and reporting lines.
Financial Plan
Our financial plan for ABC is based on the following objectives:
- To generate sufficient revenue and profit
- To maintain a positive cash flow
- To secure adequate funding
When buying an existing business, it’s important to determine how much operating capital you should plan for. Our financial plan consists of the following elements:
- Funding Sources
- Assumptions
- Income Statement
- Balance Sheet
- Cash Flow Statement
- Ratio Analysis
- Break-Even Analysis
Income Statement
| Year | Revenue | Cost of Goods Sold | Gross Profit | Operating Expenses | Net Profit |
| 1 | $1,500,000 | $450,000 | $1,050,000 | $750,000 | $300,000 |
| 2 | $1,650,000 | $495,000 | $1,155,000 | $825,000 | $330,000 |
| 3 | $1,815,000 | $544,500 | $1,270,500 | $907,500 | $363,000 |
| 4 | $1,996,500 | $598,950 | $1,397,550 | $998,250 | $399,300 |
| 5 | $2,196,150 | $658,845 | $1,537,305 | $1,098,075 | $439,230 |
Get Expert Help with Your Acquisition Business Plan
As you can see, developing a comprehensive business plan for buying an existing business requires significant time and expertise across various areas like finance, operations, marketing, and more. That’s where our expert advisors at OGSCapital can help.
With over 15 years of experience in M&A, strategic planning, and business planning, OGSCapital has helped numerous clients acquire and integrate businesses successfully. Our business plan writers can conduct diligence, analyze the deal, create projections, and craft a winning plan tailored to you. If you’re still thinking about how to buy an existing business, partner with our seasoned advisors to maximize your chances of closing and profiting.
Frequently Asked Questions
What is acquisition in business plan?
Acquisition in a business plan is buying or merging with another company to achieve strategic or financial goals. Acquisition planning can help a company expand its market share, diversify its product portfolio, acquire new technologies or skills, or reduce competition.
How do you create an acquisition plan?
To create a business plan for buying an existing business, you must define your objectives, identify and evaluate targets, conduct due diligence for merger and acquisition, negotiate the deal, plan and execute the integration, and monitor the outcomes.
How do I prepare my business for acquisition?
To prepare your business for acquisition, you should improve your business value, know your valuation range, establish an advisory board and a transition team, clean up your financials and legal documents, and prepare a pitch deck and better buy side due diligence services.
What should be included in an acquisition plan?
A business plan for buying an existing business should include an executive summary, target description, market overview, sales and marketing, financial history and projections, transition plan, deal structure, and appendices/supporting documents.
OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.
