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What should a great business plan contain?
Potential banking partners would welcome an approach from someone opening a new franchise because the business comes with a tried and tested model and comprehensive support system. However, they are backing the individual franchisee and so are expecting to be approached with an in depth business proposal that shows evidence of comprehensive market research and thorough long term planning.
The business plan needs to clearly outline your objectives and the overall strategy for developing the franchise in a punchy and clear way. Remember lenders deal with several business proposals each day so your business plan should grab the bank manager’s interest ensuring that they want to be lending you the money you are seeking. A great business plan will cover the following areas:
• Executive Summary
• Personal details (Contact details, Age, Martial status, Dependants)
• Franchisee’s experience, skills and attributes
• Short, Medium and Long term objectives / Mission Statement
• Overview of the franchise
• Local market (Research, Location, Customers, Competitors)
• Business operation (Premises, IT, Vehicles, Equipment)
• Key Personnel / Management team
• Marketing strategy
• Borrowing requirements
• Capital stake and Security
• Personal Assets, Liabilities, Income and Expenditure statement
• Financial Projections (Cash flow and Profit & Loss forecasts)
• Financial Assumptions
• 3 years Financial Accounts (Existing businesses only)
• SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)
• Exit strategy
Banks are interested in getting back the money they lend so make it clear how this will be achieved. You will need to know the figures inside out however it’s a mistake is to get too bogged down on the financial projections. It’s best to keep it simple and demonstrate what strengths you will personally bring to the business. Present yourself positively and demonstrate your commitment and enthusiasm for the business. Plan ahead for that worst-case scenario and have a contingency reserve fund to fall back on in case the business takes longer to get established than you have anticipated.