How to create a business plan for a franchise?
It’s every individuals dream to be successful, but very few ever get there….why you may ask? Well the answer is quite simple, lack planning. Even in a franchised business system, one needs a plan. Franchising may offer you all the ingredients you need to succeed however you still need to have a business plan. Creating this plan is like building the foundation of a house, only if the foundation is solid will the house be sturdy and stand the test of time. So it is very important to have a very good business plan. But how does one come up with a good business plan?
Below are some basic guidelines to help you in creating a good franchise business plan:
Step 1 - Now what?
You’ll first need to establish a Mission Statement. This is nothing more than simply stating where your company wants to go or become. Make sure your Mission Statement is tied to reality. This step will guide you in developing your business the right way
Here’s one that I like:
To change the world through technology -Apple, Inc..
Step 2 - The Business
Now you’ll need to define the business that you’re in. To do this, ask yourself: What basic needs am I fulfilling? and What role will my company play? Then you’ll need to analyze the industry that you’re in. Look at market size, penetration and market growth. Make sure you know who your competitors are and look at new technology that can give you an advantage. Don’t forget to look at the cost of doing business and what the potential for profits are.
Step 3 - Customers
A large part of your business plan should focus on determining who your customers are, discovering why your customers buy and how they make their choices. You’ll also need to figure out how you will deal with customers both good and bad as well as figuring out how you are going to attract them.
Step 4 - Competitors
Identify who your competitors are and classify them into categories like: direct competitors and indirect competitors. You’ll need to determine what they are capable of, assess their strategies and predict their moves. The more you learn about your competitors, the better off you’ll be when it comes to anticipating their next move. Remember, choose your battles wisely.
Step 5 - Where do I begin?
I would suggest you start with a SWOT analysis. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. You’ll need to identify what your strengths are (skills, resources, etc.) and what your weaknesses are (lack of skill, knowledge or resources). Opportunities are always around us. Look at how you can capitalize on some of them. You can’t ignore the fact that with every great opportunity comes, the possibility of an obstacle or threats. Make a list of all possible obstacles and threats and come up with scenarios showing how you will deal with them if and when they arise.
Step 6 - Money
Here you’ll have to not only determine how much money you will need you’ll also need to forecast for the future. You’ll also need to understand financial statements such as: Income Statement, Trial Balance, Cash Flow Statement, etc. For this part of your plan the best advice I can give is hire yourself a professional account that can guide you (and teach if necessary) through this process. You want to ensure you have enough to carry you through on those rainy days.
Step 7 - Prepare for change
They say life is defined by change. You can hold that same philosophy in business, rest assured things will change. Some out of your control (economic) and some well thought out (technology). You’ll need to try and anticipate change by forecasting trends and creating alternative scenarios. You’ll also need to address the possible effects of change.
Step 8 - Learn from others
Seek out advice from professionals such as lawyers, accountants and business consultants. I also encourage you to speak with owners of companies that you feel have becomes extremely successful. Don’t worry if you don’t have a personal relationship with them. Simply call them up and let them know that you want to learn from their success, I bet they’ll be more than happy to spend some time with you.
Check out your local bookstore or public library for books on how to write a business plan and even view samples.
Let me leave you with this:
“If you don’t take a risk, you may always find yourself working for someone who did”
Rob Lancit is President of CANAM Franchise Development Group, Inc.
CANAM is a boutique franchise consulting firm that has assisted numerous Canadians looking for quality franchises and can help you accelerate your search and find the ideal franchise that’s right for you.
Contact: Rob Lancit 1-866-730-5553 or firstname.lastname@example.org