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Setting out a business plan can seem like an unwieldy task – more about ticking boxes than adding true value to your franchise.
But that is far from reality.
Setting a strong business plan not only helps you scope out your short term goals, but allows you to benchmark your performance and look to the future with long term priorities and ambitions.
Creating even a simple document filled with thoughts and ideas can pay dividends as you work to create a successful franchise.
Your plan could contain anything, like at what point you will be ready to employ new staff, or even a calendar showing new business opportunities or milestones you want to hit – big or small.
Of course, if you plan on using it to approach the bank or potential investor you will then need to make it much more sophisticated - demonstrating the strength, capability and potential of the business.
Using your plan to set a contingency for economic downturn or competitor activity is also key.
And while the stability of the economy, which many SMEs cite as a key barrier to forward planning, is not something businesses can control, there are some aspects you can look to secure.
For example, businesses may look to fix the cost of overheads where they can, such as choosing a fixed energy tariff to help provide the certainty and confidence to plan ahead.
Looking into an energy audit or the possibility of renewable energy may also aid future planning and sustainability.
Franchisees should also utilise any available business data in planning. Think about how you could use information that your business and the franchisor has to hand to improve how you work - for staff and customers.
Writing a business plan does not have to be difficult, although it is understandable why someone new to business could find the prospect of doing one daunting.
Make sure you consider the bigger picture and look at all of the aspects involved in running a franchise, from the market in which it operates to the price of the goods sold.
It is also essential that once written, the plan is not just filed away to gather dust, but is referred to as you go on. This will show whether you are hitting your goals, or if there are any wider issues impacting how you operate.
The franchisor should be interested in the performance compared to your original plan, as their income should depend on the success of your business.
What should be included in a business plan?
The best ones should include:
Details about the franchise
The sector it operates in
The competition, both locally, regionally and nationally
Your marketing plan
Projected financial information.
Your CV and details of any key staff
Your assets and liabilities
One of the most important sections of the plan is the detail about the franchisee. This is because the success of the franchise will be determined, in most cases, by the franchisee and the effort they put in to the business.
Good research is vital and that together with planning is just common sense. In our personal lives we all research and plan ahead to a greater or lesser extent – from booking holidays to sorting out pensions and life insurance. But in business it’s even more crucial. You need to be clear in your own mind what your own objectives are and how you’re going to achieve them.
Business planning is about businesses understanding their own risks and how they are going to manage them to achieve their objectives.
You are not alone
If prepared and used properly, a business plan can help you develop your franchise, demonstrating what is working and more importantly give you early warning of what is not.
Having a business plan is not just relevant while getting your franchise off the ground - it is just as important as the franchise develops. Be sure to update it with any unexpected changes and determine whether the franchise is developing in line with the original plan. It is also good to have a document, which can be presented, to the Bank or the franchisor when thinking about expansion.
The most important thing to remember however is that a business plan is there to put you on the road to success - and keep you there.
Many franchisors will assist in completing a business plan and will have a template to get you started. Also if you have consulted an accountant they may also help.