Owning and running a franchise can be an incredibly rewarding and often lucrative endeavour but, before you start building your empire, you’ll need to arm yourself with a rock-solid business plan. Not only will this provide you with a template and guide for your new business but, it also communicates your ideas to the franchisor and potential investors.
So, how’s it done?
Often, people dread having to write a business plan but, it doesn’t have to be all that complicated and, so, we’ve put together the following ten-point guide to creating a killer franchise business plan:
1. A grabby introduction
Every good business plan starts with a concise introduction (a paragraph or two should do it), explaining who you are, what your franchise will entail and, most importantly, how you intend to go about running it. This is your opportunity to dazzle with your enthusiasm and selling skills.
2. Building your scaffold
Once you’ve introduced your business plan, it’s time to delve a bit deeper into the structure of your business. In this section, you’ll communicate the lowdown on the personnel involved and, this will include:
- Who the owner(s) will be and what their contribution to the business will be, both in terms of finance and skills.
- A list of other personnel, including a brief description of their roles and their working hours (for example, full or part-time).
It’s a good idea to be as realistic as possible within this section – for example, when you’re just starting out, a ten-strong workforce will, in most cases, be a bit of a stretch.
3. The product pitch
Next, you’ll be talking about the actual products or services that your business will be selling – but it’s not enough to just list these. For each product or service, your business plan should include:
- What makes the product/service special
- Who your target audience is
- The pain points that the product/service will solve
- Why you feel that it’s the right time to be offering this product or service
When writing this section, imagine that you’re standing in front of an audience, trying to sell the product to them – What makes it stand out? Why should they buy it?
4. Reading the market
In this section, you’ll be coming down to the nitty-gritty – why you think people will want to buy your product or service. This vital section requires actual, provable facts and figures, including:
- A profile of your target customer
- Profiles of your main competitors – who they are, how long they’ve been trading and, how their product or service compares to yours
- Current market conditions within the location of your business
- Forecasts – this last part speaks to how ‘future proof’ your business is likely to be and, so, in-depth forecasting by experts is incredibly important
Without sounding dramatic, this section really can be ‘make or break’ for your business plan as it paints a picture regarding the likely audience for your business.
5. Detailing your operations
Now you’re going to be looking at what you will need to get your new business off the ground and, this will include everything from personnel to supply and materials. For this, you’ll need to detail the following:
- What you have – a list of the resources which you already have ready
- What you need – the resources which you will need to acquire
- Critical procedures and possible alternatives
- Health and safety policies and required certifications
These things really are the nuts and bolts of your business, and so it’s important to include as much detail here as possible.
6. Premises
If your business requires physical premises, details of this will need to be laid out in this section. If you already have your premises secured, the full details should be noted here, including location, costs, business rates and other expenses. If you don’t yet have premises, you’ll be listing your requirements using the same factors.
7. Getting your message across
A huge part of running any business is in the marketing and advertising of it. You may have the greatest product or service in the world, but you’re unlikely to succeed if nobody knows about it. In this section, you’ll be laying out a comprehensive marketing strategy for your business which may include:
- Social media engagement and advertising
- Local newspaper advertising
- Real-life marketing events
- Special promotions
Before writing this section, it’s a good idea to speak with the franchisor to find out what kind of help they may offer with your marketing and, you can then factor this into your strategy.
8. Financing
This one’s a biggie if you don’t have the funds ready to start your franchise and get it up and running. You’ll need to put together a financial project to include the following things:
- Where / Who you intend to gain your funding from
- The precise figure of funding that you will be seeking
- A breakdown of what the funds will be used for, including, where applicable, funds which you will be withdrawing for living expenses
- A repayment plan detailing how the funding will be repaid and by what date
If at all possible, it’s beneficial if you can also include project earnings in this section as this can then be offset against the amount of funding required.
9. Profit and cashflow
These last two parts of your business plan will tie up the elements that we’ve already covered whilst also forming a set of financial goals and guidelines for your business. The first of these is your profit and loss forecast. As the name suggests, this is all about how much money you expect to earn and is calculated by working out how much you estimate that you will make from sales and then deducting from this figure all of your overheads, including premises rental, bills, supplies and staffing. This really does need to be as detailed as possible and should include all expenses – even down to the box of teabags you’ll be buying for the staff room.
The second part of this is your cash flow model – this is a realistic picture of the money that will be coming in and the money that will be going out – and when. When doing this, it’s important to include any one-off or ad-hoc expenses such as set-up costs for it to be completely accurate.
10. Appendix
Okay, well done for getting this far – you’ve now reached the final section of your business plan and, the good news is that this is the bit where you can get a bit creative. While the bulk of your business plan should be focused on facts and figures, with evidence to back them up, your appendix is the section where you can add compelling elements that show how you intend to stand out from the crowd. These can include:
A copy of your CV – Including details of your past achievements and employment history is a great way of backing up the proposals in your business plan – so do make sure that your CV is up to date before including it. It’s also a good idea to include the CVs of other key personnel.
Media clippings – If you’ve made it into your local paper or been featured in a magazine or ezine, be sure to include this in your appendix.
Social media – Before putting together your business plan, put some work into creating some social media pages. This is an excellent idea as it shows that you’re already thinking about marketing and audience engagement.
Testimonials – If you have reviews or testimonials of your work, don’t be shy about showing them off – this all adds to your authority and enthusiasm.
Conclusion
Your business plan is one of the most important documents that you’ll ever work on, and, as such, you need to make sure that you put aside enough time to really make it stand out. Start by gathering all of your documents and by doing your research into your market and into your target customers – and then double-check your information.
Once you’ve put your business plan together, be sure to double-check for typos and grammar errors, as these can quickly make your plan look scruffy and unprofessional.
Finally, get as much help from your franchisor as possible to make sure that your business plan is on target and on track.
