A business plan is a document explaining and describing your business.
This document is essential if you are thinking about becoming a franchisee. Why? All businesses require a business plan. A solid business case will allow you to secure funding and get your dream off the ground.
The business plan will also allow you evaluate the franchise opportunity. How will you get your franchise on the road to success? Have you considered what your contingency plan would be if your franchise had a crisis? How will you manage the franchise and what does your support network look like?
The advantage of opening a franchise instead of a brand new business is that much of the information needed for the plan will be readily available from the franchisor. Some franchisors will provide templates or parts of plans ready for use.
What does a business plan cover?
The business plan details the running of the franchise. Chris Roberts, Director of Franchise Finance, explains that a business plan is like a “sat nav, it will help you to deal with any obstructions that you may find along the way” .
Financial forecasts and costs
Financial forecasts show your planned pathway to profit. You can use this information in the future to track your progress and ensure that you are en route to make your business a success.
It pays to be thorough. Include information on the franchise licence fee along with the number, cost and payment schedule of royalty payments to be paid to the franchisor. Leave no stone unturned and add all fixed and variable costs to the document including advertising, equipment and where applicable, the cost of staff.
Remember, the franchisor will want you to succeed, and often this information will be available upon request. Detailed financial projections will provide the opportunity to reevaluate the venture, allowing you to rethink or reaffirm your decision of buying into your chosen franchise system.
The document should show your plans to develop each part of your business including marketing and customer service. Make the most of the resources on offer from the franchisor and ensure that your business case includes evidence and research. This will show that you understand the market and investment potential.
Include industry analysis to show the target market sectors for example, types of customers targeted, location, market size and the market growth potential.
Why did you decide to buy into your chosen franchise system? Answer this question in your business plan by explaining and defining the unique selling point, USP, of your chosen franchise.
What would stop the business turning a profit? Have you thought about environment issues such as natural disasters or financial changes?
Evaluate the potential risk involved to show that you are prepared. All franchises come with a risk and so creating a contingency plan will ensure you have the strategies in place to control a crisis.
Detail is key to a successful plan. Think about the business sector and marketplace, write about the potential impacts of different scenarios and how you would handle each situation.fra
Contact Franchise Finance if you would like to speak to a professional for advice and guidance on how to write a business plan. Alternatively, there are useful resources on UK Government’s Business link site, with the option to download a business template.
Interested in finding an opportunity worth investing in? Take a look at the different franchises available.Tags: business plan, franchise finance