One of the first steps to starting a business is writing a business plan. You will likely need a business plan to get franchise loans, but it’s also a good way to get yourself organized and off to a successful start. Your franchise business plan should have all the details you need to be prepared for the next five years. Take a look at these tips for writing a franchise business plan that is actually useful.
Business Plan Basics
When you start running your own business, it’s tempting to focus on the present and the tasks you need to complete right now. But owning a business requires planning, and in order for your business to succeed, you really need to establish goals for the future. A business plan does just that.
Let’s start by defining exactly what a business plan is. A business plan is a document that projects your company’s growth in the next three to five years, by making detailed goals for your spending, borrowing, revenue, and operations. You should refer back to this document frequently and continue updating it as you gain more information about how your business is growing and where you see it going. A business plan is not a static document. It works best when it changes to reflect your franchise’s current status and goals.
Don’t worry, learning how to write a business plan isn’t difficult. What you basically need to show is that your franchise can realistically generate enough revenue to cover your operating expenses and pay back your loans. You can do that by including these seven sections in your business plan:
- An executive summary that gives the highlights of your plan.
- A company summary that provides a simple factual history and states ownership.
- A description of your products or services and how they stand out from competitors.
- Market analysis regarding your target customer demographics, competitors, and potential market growth.
- A strategy and implementation section that covers how you plan to sell your products or services and what specific goals and milestones you are establishing for your franchise company.
- A management summary that discusses the experience, backgrounds, and skills of the management team, as well as their key accomplishments.
- The financial plan, which contains important information about sales and profit projections. Note: this section should be updated often to reflect actual trends.
These sections do not need to be lengthy. It’s better to keep your plan succinct so it’s easy to work with and refer to. And if you are using your business plan for a loan, a shorter plan can make the process faster and easier for everyone involved. Just don’t leave out any important details.
Special Considerations For A Franchise
The information above can make it sound like the steps for how to create a business plan are difficult and time-consuming. Fortunately, franchising makes a business plan easier. The franchisor will most likely provide you with plenty of documentation that will help you with how to word your plan. You can pull company info, product or service descriptions, and strategies straight from their resources. Likely, you will also be able to utilize financial information from the Franchise Disclosure Document (FDD).
A Business Plan Template
Other good news for franchisees is that many franchises provide a business plan template that can guide you on how to make a business plan. But if your franchisor does not offer a business plan example, you can still find plenty of templates online, like the ones below.
You absolutely do not have to create your plan entirely from scratch. In fact, using a business plan sample as your guide will help to make your document more readable and easier to use.
Final Business Plan Tips
Remember, your franchise plan does not need to be complicated. Only put in the information that is needed, and opt for bullet points and charts where you can use them. Long paragraphs will only make you avoid reviewing your plan and making changes as needed. Be honest with yourself and make conservative estimates. If your revenue ends up being higher than projected, that’s great! But if it’s much lower than your projection, your franchise could be in serious trouble because you will not have planned for that situation.
Also keep in mind that just because you’re using a template does not mean you have to stick to it exactly. Feel free to make the document work for you and your franchise in whatever way you see fit. A business plan that follows these tips will do more than just help you get needed funding. It will keep your franchise on course for successful growth.