Your business plan needs to give investors and potential partners good reason to support your vision. Here are 10 things a good plan says about you
When buying a franchise, a business plan speaks volumes to those you interact with.
It will tell your audience, investors and potential partners everything they need to know about your future plans. It should always be realistic, fact-based and actionable, as most lenders are smart enough to know a solid plan from a weak one.
A detailed plan will convince your audience that you’re worth supporting and partnering with. Plus, it will reinforce the idea that you have a feasible, well considered, potentially profitable venture.
Here are 10 things a concise, informative business plan says about you and your franchising abilities:
1. You’ve done market research
You should never underestimate the power of adding market research statistics to your business plan.
Many of the world’s most successful businesses credit their success to regular market research. This research gives them a clear picture of their target markets, key consumer problems and their most immediate competitors.
Conducting market research is the simplest way to stay up to date with market trends and maintain a competitive edge by spotting business opportunities as they arise. A solid business plan will show investors that you have a great understanding of your marketplace. In turn, this will help you grow your brand into one that stands up consistently against its rivals.
2. You understand the industry
You need to be able to explain the state of your industry and its growth potential. Then, you need to explain how your company fits into the sector’s landscape.
Demonstrating a cohesive understanding of the industry you aim to target is crucial. It will show investors and potential partners that you’ve got a handle on the industry’s nuances and its distribution and buying patterns, among other factors. This is true even if you don’t conduct a formal industry analysis.
3. You understand the franchise model you’re buying into
A franchise is an agreement that gives a franchisee permission to make use of a franchise’s name and trademarks for a stipulated term.
Adopting a franchise business model allows entrepreneurs to grow their own businesses without the added expenses of building new units. However, there are three main types of franchise business models:
• Business format franchises.
• Management franchises.
• Product distribution franchises.
Each type differs from the next.
Drawing up an airtight business plan tells investors that you know exactly which model you plan to use and how to use it to grow a sustainable and profitable enterprise.
4. You have a road map for success
Your business plan should detail all the steps you need to take to build your franchise from the ground up. These steps will form your business road map, which is essentially your map towards reaching your goals.
You’ll not have all the answers from the get-go, but if your plan contains a comprehensive road map it’ll show that you’ve put in enough thought to allocate resources and set achievable goals.
5. Your goals and objectives are clear
You might not have every step planned out, but your business goals and objectives still need to be clear and well considered.
Your business plan will tell your audience that you have tangible goals in mind, along with realistic strategies through which to reach them.
Your goal-setting process will help you identify how to best use your franchise’s resources to achieve your objectives.
6. You have a clear strategy
Your business can drift away from its customers and lose its competitive edge within your industry without a clear strategy in place. We call this process strategic drift and it could eventually prevent your enterprise from turning a profit at all.
Adding a concise strategy to your business plan will help sell the idea of your franchise to investors. It will also foster culture-based management to inform future employees’ decisions without stringent supervision.
7. You’ve plotted a growth trajectory
Showing off your documented growth strategy will prove to your audience that you’re capable of gearing initiatives and decisions towards achieving your business’ established goals.
It will show that you’re capable of both initial and iterative planning, as well as making strategic shifts based on market changes and essential new data.
Ultimately, your growth trajectory will demonstrate that you have a clear plan to grow and expand your venture. It will also highlight that your trajectory is backed by solid market information and a will to be flexible in achieving this growth.
8. Financial projections and budgeting are under control
Financial projections and budgets are there to help you properly and sustainably allocate your franchise’s financial resources. They identify the point at which your enterprise will begin to prove profitable and indicate key expenses you’ll need to cover through capital investments and loans.
Your business plan’s budgets will inform your audience that you’re capable of balancing your expenses and income and that you’re prepared for the many financial obligations that come with operating a franchised business.
9. Staffing and management needs are clear
Your business will need a certain number of staff and management professionals to function at its best. Your industry, its size and unique demands are the basis for these needs.
A business plan should show that you have clear staffing and management needs in mind for your venture. This will ensure operational and organisational efficiency that you’ll scale as your franchise grows.
10. You have the ability to review milestones
It’s essential that you’re able to review and learn from your business’ milestones. You also need to be able to identify and set risk mitigating milestones to keep your firm in the clear over the long term.
Including these in the operations plan section of your business plan says that you’re able to prioritise your time and hire the right people at the correct intervals.
If you’re unsure about the various sections of your plan, a business plan template can be useful in outlining what goes where. By following a template, you’ll cover all that’s needed in the right order.
Creating the right impression
Any good business plan should clearly demonstrate that you’ve done the research, calculations and analyses necessary to operate a successful and profitable franchise.
It should show that you’re able to review your company’s milestones critically, recruit enough staff to meet your operational needs and maintain a consistent and positive growth trajectory as laid out by your growth strategies. If it does all of this, it sets you on the path to success.
Jill Goodwin is a content champion for a variety of online publications. She often covers topics that cater to business owners and entrepreneurs, with a focus on finance, productivity and management.