Putting together a solid business plan before you file any applications or sit down with a finance company, a loan officer—even with a family member—will help you make a clear, compelling case for funding. It is also the first step to successful franchise management. You've gone through your options and now a plan is the best way to have a clear path and direction when owning a franchise.
Your business plan should include each of these basic components if you want to make sure your franchise management is solid.
Plans and Goals are important, listen to pete and nat's ideas on how you can master goal setting
The Business Plan Parts
Executive Summary
Picture this: You go to a business conference and win the biggest door prize possible: a 3-minute pitch session with Warren Buffett himself. What would you say to convince one of the wisest businessmen in American history to invest in your franchise?
Whatever you’d use your three minutes for—that’s what belongs in the Executive Summary of your business plan. This is your big chance to explain (1) what need your business will fill; (2) why the business you’re planning is a brilliant way to meet that need; and (3) why you are the best possible person to bring that business to success.
You’d be wise to work on the assumption that the executive summary is the only part of your proposal a potential investor or lender will read. If it doesn’t make a strong case for turning the page, it will be.
Ideally, your executive summary should explain what distinguishes your franchise concept. Great placement, a unique service or customer treatment, a marketing edge, an innovative product—any of these things can make your summary stand out.
In addition, use your executive summary to boast about your own qualifications. Did you run a billion-dollar department for your previous employer? Has your experience given you unique access to the industry or community? Are you uniquely able to run this business? Tell your readers why on your first page, while you’ve got their attention. Keep your information clear, focused and at the macro level.
Business Description:
What kind of business is it that you’re changing your life to launch? What need does it fill? What are the products and services it will offer? Who will it serve? Why will it have a competitive advantage? Your franchisor should have already answered all of these questions for you, and so your job in terms of the Business Proposal is to share those answers and customize them to the specific unit or units you intend to launch. This will guide your franchise management as you grow your investment.
Industry Outlook/Competitive Analysis
Your industry outlook should briefly summarize the history of the industry you seek to break into and offer a realistic and enthusiastic snapshot of potential /expected growth. Explain why this growth is coming (for example: a growing demographic) and how your company will be uniquely positioned to meet the need. This section should feature hard numbers and well-researched projections.
Marketing and Sales Information
What is your strategy for bringing customers to your business—or bringing your business to them? How will you build a customer base and how will you keep that base growing? What sales strategies will drive your success? Your franchisor will have already not only researched, but also successfully implemented, these strategies. The same reasons you find the company a compelling investment should be the reasons your lender or investor is willing to put money behind it, too.
Operations and Franchise Management
How will you run your business? What are the logistical challenges, and what are the solutions you’re ready to implement? What will your daily tasks and responsibilities entail? What about those of your employees? This is the section that should include the nitty-gritty of your operational details. Franchise management is multifaceted and being able to articulate those details here demonstrates to the lender that you’ve thought things through to the last detail.
Financial Data
This section will include a clear depiction of how much money it will take to make your business fully operational and where that funding will come from. Your franchisor and its Franchise Disclosure Document will be a good source of information about startup and operating costs of the business.
Sample Financial Pro Forma
A pro forma is a projection of a business’s future costs, sales, and other financials based on the information available. You can fill out a basic pro forma on your own, but you may the help of an accountant to create a detailed and feasible projection for this portion of your business plan. No one has a crystal ball when it comes to the financial future, but as a potential franchisee, you should be able to create a well-thought-out estimate of expected expenses and sales.
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