How to create a business plan for a franchise?
Your franchise will only be successful if you create a successful business plan. This won’t only serve you when it comes to getting financing, but it will be a kind of guide detailing all the steps to take if you want your business to reach its goals.
We simply need to look at franchise business such as McDonald’s which have achieved great success in the world of franchising, precisely because they were able to write a revolutionary business plan.
Don’t even know where to begin in writing it? Here you will find the information you need.
Find out how to create your franchise business plan: step by step
First, we need to understand the difference between a traditional business plan and a franchise-specific business plan. The latter must bring together the key elements of this business model, which are the franchisee and the franchisor.
In the business plan introduction we find basic and essential information about our business model:
- Contacts: Make sure to include a list of names and contact information within these pages. The idea being that you can quickly find any number, in case there is an emergency or any other eventuality
- Reason for being: You should also have an annex or section specifying the reason for the business plan. This will help you map out your goals and not deviate from the established plan.
- Table of contents: we will also create a table of contents that will allow us to quickly go to the desired plan section. This is important whether the plan is available only in physical format or if we are creating via a digital medium.
A complete description of the type of franchise
The next section of the business plan should be a description of the company that is as detailed as possible, which is known as the business summary.
This description must include, at the very least, the following details:
- Identification of the product or service to be marketed.
- The size of the entity.
- Who is the main competition and where is it located in regards to respective entity.
- What will be the operational method that will be used to launch the project (you don’t need to be as detailed here; we can use this as a first draft.)
- It would also be good to consider some of the obstacles and challenges you might come across.
You should dedicate a section of your business plan to defining the Administration area. Let’s talk about the team that makes up the franchise and what their roles are, what experience they have, and any other information that could be relevant.
In the franchise business plan there is another section that we cannot forget: we must go into detail on how to attract customers.
- Start by creating a list of the franchise’s strengths. It’s important to highlight the differential values: that means what our company has to offer that no other company can offer.
- Additionally, we should also write the advertising and marketing strategies that we plan to use. Here we must take into account the Franchisor’s stance which might not allow certain marketing campaigns to be carried out.
Costs and expenses
Another section of the business plan must be dedicated to the costs and expenses of the entity. This way we know how much we might need in order to know if we will need additional funding.
It’ll help us understand the entity’s financing needs to know if the related costs will be covered until there are profits, or if we’ll have to go into debt to keep our business moving forward.
Important: In drafting this section, it is essential that you have a bit of foresight, as there could be incidents or difficulties that could complicate the proper functioning of the business.
Tips for creating your business plan
In addition to the previous steps, you should also consider the following:
- Your business plan should be realistic, avoiding false expectations.
- Think of a contingency plan, a plan B that details the problems that may arise and how we’re going to solve them.
- At the very least, there should be a commercial profile and a more technical profile in the company. You should also have a clear plan regarding team expansion in the short, medium, or long term.
- It would be ideal to have an expert to advice you. If so, be sure to include this in your plan.
- Add a realistic implementation schedule as well. It is important to be preemptive and to understand that deadlines may not always be met to the final second.
With these steps and tips, you should be able to start creating your business plan.