Writing Your Business Plan
So… You’ve taken that first step and you want to run your own business. Congratulations! A business plan is a vital step in that process. This stage is about organising all your ideas and plans in one space which makes it much more real and achievable.
A Business Marketing plan, if done well, can show franchisors and potential funders that you are serious about your new business and that you have the drive and determination to make it succeed. It can also be helpful for you, to give you a sense of your next move and where the business will be headed.
Writing a business plan enables you to anticipate challenges and issues you will face during the start-up process. You can craft solutions and decide exactly how you will respond beforehand, meaning nothing will derail you. Be sure to complete research before and during the writing process; cutting corners will be a substantial disadvantage.
What is a Franchise Business plan?
A franchise business plan can be thought of as a ‘train track’ of how you want to run your franchise and is also used to obtain financing from a bank. There are two components to a plan: what you will do with the bank’s money and your own personal goals for the business. On the financial side it will outline how you will use the bank’s money and how you will pay it back. On a personal and business side it will show how you plan to make the business successful.
Some franchisors may provide help with business plans, though there are legal liabilities associated with franchisors making any projected earnings claims for inclusion in the business plan. So, your franchisor will help you to prepare the business plan but should not write it for you. After all it is your business plan and only you know how you want to run the business. Drawing up a business plan will keep you focused on achieving your goals.
What is the main difference between a traditional business plan and a Franchise Business plan?
The main difference is that a franchise plan must combine components of both the franchisee and the franchisor, which means you are merging different elements of both companies.
Where do you get the information you need to draw up your Business plan?
Once you have signed the franchise agreement the franchisor will provide you with the necessary information you need, such as the company’s management structure, marketing plan, demographics, daily operational procedures, start-up and ongoing costs.
How do you write a Franchise Business plan?
Most business plans follow a fairly standard format which can be found in business books and by searching online. You can find many resources in business books and online by doing a web search to help you with the layout, structure and content of your business plan. The important thing to bear in mind is that you are combining parts of the two companies: franchisee and franchisor.
There are several useful resources such as a business plan overview with details of the content required in each section.
What to Include
So what should you include in your business plan? Each plan should be customised, of course, but there are certain standard elements needed. Eric Tyson and Jim Schell, in their book Small Business For Dummies, suggest breaking a business plan into the following six sections:
After a cover page with your name, address, telephone number, and business name, give a brief overview of your business. You might describe the sector/market, your business, your goals for the business, and anything else that gives you an edge over the competition. Your mission statement, should you have one, would be included in this section.
Tell readers about yourself and your business partner(s) and colleagues. For each person, provide a bit of background on their education/schooling, prior work experiences and offices held, and any relevant and noteworthy achievements. You want to be sure franchisors and investors have a clear picture of who will be running the business; they need to feel you are trustworthy and capable so show them that you are!
What is the competition like in your industry? Who is your target audience? How are you going to reach them? What will make potential customers choose you over anyone else in the sector? How will you connect with them? What advertising techniques will you use and will you employ a PR agency? Connecting with the right audience is an important part of your plan so sufficient time, energy and resources need to be devoted to getting this right.
You’ve probably done a lot of ‘big picture’ thinking when planning how to start your business, but here you need to examine the nuts and bolts of the operation, the day-to-day operational needs. Tell readers how many employees you will have, what they will do, what supplies and resources you will need, and how the business will be structured/organised.
Admitting that there are risks involved in beginning a business doesn’t make you seem unconfident, it makes you realistic and prepared. Difficulties will happen and ignoring that just means you will face those trials without a plan. So show that you are a realistic, thorough business owner who knows how to counteract potential pitfalls.
Financial Management Plan
How long will it take for your business to make a profit? Does your market have strong periods and dips? Or is it consistent year-round? Using projections here is fine, but try to be as accurate as possible as you predict the expenses and generated revenue for your business.
Stay upto date
Think of your business plan as a living document; come back to it and make improvements and adjustments if things change. You want to be sure it is up-to-date and accurate if it is to be used to give your business credibility and inspire confidence. It will also benefit you personally to keep it current, as it will show you any progress you have made and keep you on track to your goals.
When writing your business plan, remember who you are writing it for. Whether it is the franchisors, investors, or potential partners, be sure you speak to them via the language and information conveyed.
Should you update your Business plan in the future?
Yes, as the business grows and changes you will need to review & update your plan so that it reflects the changes in your business.
Who should help you write your Business plan?
Get input from your franchisor and other professionals. An accountant is also a useful source of advice, since he or she usually has experience obtaining financing for their clients. Other experts to consult include experienced business people, or somebody who has experience as a franchisee. It is also a good idea to hire a professional writer to polish your final draft.
Will your franchisor need to ‘approve’ your Business plan?
No, they do not need to approve it, it might help if you show this to them?
How long does it take to write a Franchise Business plan?
This is not an easy question to answer. Generally it may take several weeks or many working hours but it really can vary depending on the person and whether they write and research as they go along or if they do it at the end of the process. In some industries it is easier to write a business plan because the necessary information is more readily accessible than in others.
What is the basic outline of a Business plan?
Your business plan should include the following sections:
- Executive summary
- Mission statement
- Business structure
- Industry analysis
- Market analysis
- Marketing plan
- Business management
Closing Quick Tips
- Keep it short, sweet and simple.
- Jazz it up – add charts, colours, and personality.
- Be honest – embellishments can get you into trouble.
- It’s all in the details, so include them.
- Start strong – your excellent plan is worthless if no one reads past the first paragraph.
- Have someone else check it over; two sets of eyes are better than one.
Follow these tips and you will be running your dream franchise business in no time!