As with any new business, creating a solid business plan holds the key whether you are into creating a startup or franchise. If you are a franchisee, your business plan is a basic template of your expectations you may have of the franchise business, mostly listing the challenges and the preparedness to face them. If you’re looking to secure financing or funds for your new franchise, most investors will ask you to prepare a business plan. The good news out here is that a lot of homework will have already completed by the franchisor on your behalf versus framing a startup business plan from scratch. Though there a lot of ready–made business templates online, we believe this blog will serve as a primer, if any, to draft your own franchise business plan in no time:
- Executive Summary:
This portion of your franchise business plan should define the business’s objectives and goals. Start with a brief description of your service and product offerings and mention the objectives. How can you make a mark in the marketplace? What will be the growth potential? List out the success rate of your business and how it can accomplish its objectives, given the market dynamics and competition.
- Business Description:
This part of the business plan will cover the full description of the franchise business. It will outline the history and overview of the franchise. Description of the services/product offering, a summary of the competition and market, description of the operation process for delivery and an overview of the challenges and risks must be covered in this section.
- Management Summary:
This portion of the franchise plan should integrate the profiles of the members of the management team involved in the day–to–day– This segment should focus on the team’s background information and the required experience as much as possible for each team member focusing on things that are important for the franchise business.
- Sales and Marketing:
Being a franchisee, you can’t have much say in the sales and marketing of the franchise business. But you need to research their process for pulling in new customers and incorporate the explanation of the advertising and marketing support provided to you by the franchisor. How will the word about your franchise spread about in the new location? What are the franchisor’s ongoing advertising campaigns? Talk about your level of involvement in the franchisor’s local advertising and marketing campaign and integrate a plan for your specific unit to outline how you’ll be able to drive quality leads to your business.
- Financial Projections:
A franchisee has to keep in mind that profitability is a variable factor from one unit to another. There are a number of variables factored in the process of predicting profits if it is an individual franchise location such as sales volume, management and geography. Talk to the franchisor about it and to the other franchises as well. You need to be quite tight and intact when making financial projections.
- Financial Requirements:
Any financial plan should incorporate three key items: A balance sheet, a profit and loss (P & L) statement and cash flow statement. Information is also readily available on the estimated initial investment and startup costs. It pays to research any ongoing royalties and fees that may be needed of you, and ensure you talk to your franchisor about any other form of costs that could likely surface during the first year of operation. What is the operating cash you need to ensure before starting operations? What is the time before you make a profit? All these information should be taken into consideration and incorporated in your business plan to make sure you have sufficient capital for the successful launch of your business.
Though there is no exact formula for the development of your franchise business plans, the above-mentioned points are fundamental if you need to develop one. Remember in simple terms that with a franchise business plan you are essentially developing a sales pitch mentioning why and how your business will prove successful.