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What A Good Business Plan Can Do For You

Posted: 13th June 2017 - Last updated: 7th June 2018

You’ve attended the shows and you’ve found what you’re hoping will be the perfect franchising opportunity for you. But first, you need a business plan. Many potential start-up franchisees are daunted by the prospect of compiling a business plan. But it should not be an intimidating process - a good business plan is a route map to future success, as well as helping you to secure finance and support. Taking time to complete it before you start your franchise will help you think methodically and develop and sharpen your ideas about your business.

A good business plan is a route map to future success

Key considerations

What are the key things you will need to consider when preparing your plan?

It should set out details of the type of business you will be operating in your chosen franchise. It should also define the long-term objectives - a good franchisor will help with this, but you should understand the figures and own the business plan.

In addition, it will provide a blueprint for running the business and a series of benchmarks for both you and the franchisor to check progress against.

A good business plan will contain the following:

Summary business description. Details of the franchise being purchased and the financial needs.

Market analysis and product/service. Research and identify local competition and assess what the likely demand for the product/service will be in the specific territory.

Market strategy. Outline intentions for marketing the product/service and how the sales figures are shown in the projections will be generated.

Management plan. Include details of the type of business (eg, sole trader, limited company) and CVs of key personnel. Set out the structure and key skills of the management team and staff.

Operations. Analyse the capacity and efficiency of the current operation and any planned improvements. What premises does the business have? What production facilities are there and how is production organised? What is the capacity of the current facilities, compared with existing and forecast demand? What management information systems are in place?

Financial data. At least two years’ projected figures are required, including a balance sheet, cash flow and profit and loss statement. Ensure projections correspond with the information outlined above and they’re realistic. If it’s a resale franchise, include details of the existing business being sold. Has the business been growing? Is it profitable? A copy of previous years’ accounts should also be included. Be confident about your figures and memorise any vital facts about the business.

SWOT analysis. A one-page analysis of strengths, weaknesses, opportunities, and threats. Strengths might include brand name, quality of product or management. Weaknesses could be lack of finance or dependency on a few customers. Opportunities might be increasing demand or a competitor going bankrupt. Threats could be a downturn in the economy or a new competitor.

Think about the purpose of the business plan before you write it

Fundamental rules

To summarise, here are our fundamental rules for writing a business plan:

Do:

Think about the purpose of the business plan before you write it.

Focus on the key information the reader will want.

Highlight future plans, as well as describing the current situation.

Be realistic.


Don't:

Waffle or include unnecessary detail.

Include over-optimistic assumptions.

Ignore competitive threats and weaknesses.

The more solid information you can gather, the better the business plan will be. When requesting finance, a bank will look to assess the proposal using all the areas covered above.

A well researched and written plan will show a bank you are committed and understand the business, meaning a request for finance is likely to be looked at more favourably.

Don’t be afraid to talk to your bank. We can help you to develop a financial package suitable for your specific needs, using all the options available. By working together, we can help to ensure your business develops to its full potential.

So, with your business plan in hand, it’s time for the exciting part - it’s time to make contact with your potential franchisor. But before you do, read on for our essential advice.

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