Elements of a Good Business Plan
What Should A Business Plan for a Franchise Contain?
Starting a franchise includes many of the same features that are involved in starting and running a traditional business.
The only difference is that you are using a proven model and may have help from the company. Because a franchise is a business, you need to have a business plan that is geared to the needs of a franchise.
A business plan for a franchise is more complex than one for a regular business, but the purpose is the same. It will provide your business with a guide for the daily operation, the goals, and emergency directions if they should ever be needed. The direction is designed to ensure that both the franchisor and the franchisee are protected.
The All Important Principle in a Franchise Business Plan – Protection for Both
Your business plan for your franchise should have the general idea that you are interested in protecting both your own business and the franchisor. This will certainly strengthen your claim for needed funds as possible lenders see that you rightly understand your relationship with the franchisor. If you seek to protect the franchisors interests, the lenders will also know that you are interested in protecting their investment, too. It is a mutual interest because anything that builds your business will also help the franchisor.
The Main Elements of a Business Plan
Although there are a number of sub points in a business plan, here is a basic overview of what is in it.
- The Introduction
This part of your franchise business plan covers the basics of the business. It presents a description of your business, your products, your uniqueness, and your general plan to meet the needs of your target market.
- The Management
This part of your franchise business plan presents what form of management your franchise will use, and who will fill each position. It covers the qualifications of each person in leadership, their experience and resumes, and any people that will be used for problem resolution and business advice. It also covers the hiring and firing policies for employees, as well as motivational tools and rewards to be used.
Identifies who your customer is and how they will be marketed to in order to get their business. Presents methods to be used to reach target market and identifies unique aspects of the business in order to separate you from your competition.
- The Financial Section
This section includes how much money is needed to start and run the franchise business – the cash flow.
It will need to include projections for the next three years and indicate where the break even point is.
All money coming in, and products or services provided will also need to be shown. This will reveal the ability of your franchise company to be able to support itself – if needed.
It is very important that the financial information of your franchise be very realistic – even conservative. In a day when there is economic hardship, you need to allow for unforeseen problems.
How you intend to pay back your lenders is also very important. You will want to include what happens if you should go out of business – how you will resolve paying off the debt.
- The Research Exhibits
The basis for your conclusions needs to be revealed in this section. This includes your research and the sources from which you obtained them. Official sources work best, and highly detailed information will show you did your homework.
Upgrading Your Franchise Business Plan
A Business Plan is only as effective as it is able to keep up with the status of your business. This means that it will need to be reviewed and updated as your business grows and changes. In most cases, an annual upgrade should be sufficient.