There is a myth that seems to have gained lots of followers, which is that a franchise does not need a business plan. Some people still think that there is a business plan that is “given by the franchise company” and is somehow all that you need to open and run your operation. We don’t know where this myth originated, but it is just a myth. dedicated server . And a potentially dangerous one at that.
The truth of the matter is that there is no single business that does not need a business plan, and franchises are no exception. The process of writing your business plan is essential because it forces you to go through mental exercises that get you prepared to make correct decisions.
It makes you anticipate challenges and solve them in advance, saving you time and money if they occur. And of course, no third party investor will give you a second thought without taking a look at a business plan. It is your wedge in their door and the first document they will request from you when you approach them.
The good news is that as a franchise, you will be able to use much of the franchising company’s information and resources in your own business planning, which will make it significantly easier. The franchisor will have a great deal of components that have to do with business operations and marketing that you will be able to include in your business plan saving yourself a lot of time and work.
The main sections of your franchise business plan should include the following:
Business Overview. This part should describe your business, identifying the product or service, the local market’s size and competition. It should have an overview of your approach and operations, as well as the anticipated challenges that your franchise business can expect to be dealing with.
Management Structure. Describe your key managerial positions and appointments, down to detailing names and qualifications of each of your managers. Their backgrounds and professional accomplishments should show that they are capable to drive your company to success.
Marketing Plan. Go into some detail describing just how you intend to attract new customers to your business. Of course, most franchises enjoy the advantage of their name being already known and the franchisor investing in heavy advertising, but this should still be included in your business plan, along with how you are going to do your part of the marketing work in your specific branch and area.
Financial Needs. Even if you are funding this endeavor on your own, or are getting help from friends or relatives, make sure to always have a section in your business plan that describes your financial needs. Outline your set-up and operation costs, wages, marketing expenses and operating losses. This part is done to make sure that your financial forecast (next section) is realistic. And of course, knowing your monthly cost of operation sets you up for more realistic planning.
Financial Forecast. Your business plan should include income and cash flow statements, as well as detailed balance sheets that substantiate the anticipated financial performance of your franchise business. When you are preparing those projections, make sure to include extensive notes that explain all your assumptions, and keep the projections conservative. Being overly optimistic in this may create room for mistakes and set your operation up for failure.
If you are still not exactly sure where to begin and could use some assistance from business plan writing professionals, feel free to give us a call and we will get your show on the road!