By James Popkie
In the process of building and financing your franchise, a business plan is a crucial step. It helps lenders get an idea of what your scope is as well as helping you map out the success of your franchise. If the idea of creating a business plan seems overwhelming, here are five tips to help you build the right type of plan.
- Start with a franchise summary
Begin with a summary of the franchise you intend to purchase, and your overall vision for how this franchise will find success. You’ll want to include background information on the franchisor, including their track record, their other franchisees, and their products and services. The introduction should also include an appraisal of the general market that this franchise will be catering toward.
- Analyze the competition
Next, you should elaborate on what makes your products or services stand out from the competitors. What specific features or benefits do your products or services contain? What makes your franchise unique, what sort of niche does it embody, and what will make it especially marketable and profitable?
- Outline marketing and operations plans
Describe the state of the market sector, including the competition and the market trajectory. This can include market research such as demographics and characteristics of the customer base, the expected market share, and the overall marketing strategy. The operations section looks at the business principles and outlines day-to-day operations.
- Set financial goals
Finally, the financial section concerns how the franchise is expected to perform financially, and clarifies your own personal financial situation. This section should ideally include the monthly budget and cash flow projections for the first two years in which the franchise will be operational. While completing the financial analysis, it’s advantageous to show personal financial statements that outline your net worth.
- Determine your audience
A business plan can be directed toward different audiences. It can be internally focused, directed toward people within the company, or externally focused, addressing the concerns of external stakeholders, such as investors, customers, clients, lenders, and donors. The plan often encompasses a timeframe of three to five years. The plan can be presented on paper, digitally, orally, or through a combination of a few methods. How you present your plan often depends on who your audience is.
Adapted from the July/August 2016 issue of FranchiseCanada. Check out the current issue of FranchiseCanada, on newsstands now, or you can order your subscription by calling 1-800-665-4232 ext. 224.