While your franchisor will provide some guidance with regards to your new franchise, it’s up to you as the business owner to develop a comprehensive business plan. If you’ve never written one before, let this post be your guide.
The Purpose of Your Franchise Business Plan
A business plan, whether for a franchise or any other business, is a tool designed to help you organize your ideas about your business, set goals, and outline how you’ll achieve them. If your business plan is only going to be used by you, you can keep it pretty simple and only a few pages long.
If you plan on seeking a business loan or other financing, your lenders will likely ask for a business plan as a means of ascertaining how secure an investment you and your business are. This is where a more detailed franchise business plan comes in handy: the more information you can provide about operations and sales projections, the more likely you will be to get approved for funding.
The Primary Components of a Business Plan
Depending on how in-depth your business plan needs to be, you might skip over some of these sections or make some more fleshed out than others. But typically, a business plan should include:
- Executive summary: High-level overview of your business plan
- Company overview: Details about your company, legal entity, goals
- Products/services: What you’ll sell, its role in the market
- Market analysis: Size of market, competitors, strengths & weaknesses
- Strategy: How you will reach customers, promotion, pricing
- Management team: If it’s more than you running the business, info on key employees
- Financial projections: Income statements, balance sheets, estimations
Tips for a Successful Franchise Business Plan
There are entire books written on how to create an effective business plan, so I’ll leave the big stuff to them. But here are some tidbits that may make your efforts in writing a business plan a bit easier and more fruitful.
Write the Executive Summary Last
Even though it goes at the start of your plan, you may find it easier to summarize your business plan once you’ve put it all together.
Have Someone Else Read It
It may be harder for you to catch errors or confusing information than for someone else to, so ask a trusted friend or someone with sharp editing skills to read through it once it’s done. Don’t sweat changes; your business plan should be flexible and updated as your business adapts to market conditions, so don’t consider it set in stone.
Review it Regularly
It’s all too easy to put that business plan in a drawer once you write it, but it doesn’t really serve its purpose that way, does it? Set a reminder to review it a few times a year to ensure that you’re still working toward those goals you outlined in it.
Know Your Numbers
If you do plan to seek funding or a loan, you better believe that lenders want to be assured that you know your financial details. Know your profit margin, revenues, and sales forecasts so you come off as an intelligent business owner worth investing in.
Your franchise business plan is an essential document to not only launch but also grow your franchise business.