Franchise Business Plans – How To Write A Franchise Business Plan
When you set off to start your own business for the first time, a very good idea is to go with a franchise. After all, the systems are already in place, the business model is already proven, and you will have help getting your business off the ground from your franchiser. But like anything else in life, starting a franchise business should have a franchise business plan.
When you write a business plan for a franchise, there are plenty of different aspects you are going to need to consider. In a franchise business plan, you are going to have to account for a variety of variables beyond just the product and the logo (which the franchiser should already have well in hand). Any one of these facets, if handled poorly, could derail your business… or derail your plans to get financing from a bank, a broker or hard money funding.
Your franchise business plan should say who’s running the shop.
For one thing, all good franchise business plans have a management summary. In this part of your franchise business plan, you determine how much management personnel you are going to need, and for precisely what purposes. Obviously, you cannot run the entire operation all by yourself. Another important part of your franchise business plan’s management summary is to detail payroll and compensation.
A manager takes on a great deal of responsibility, in order to reap a certain level of compensation. You are going to have to put a great deal of thought into how much pay, and what degree of benefits you are going to bestow upon your managers. If you provide them with too few benefits and perks, they will tend to be less loyal, as they seek the proverbial “extra nickel down the street.” If you provide too many perks, management may begin to think that they are entitled to more than they are actually worth to your business. On the other hand, if you provide too many costly benefits (such as extremely low deductible insurance and a company car, or other such unnecessary trappings), you may find that your managers are taking away nearly all of your potential for profits.
Franchise business plans should say where you would be located.
Another area that your franchise business plan ought to cover is the location of your business. Now, if your business is a direct sales or online outlet, it will not especially matter if you lease an inexpensive space in a run down area. Naturally, if you expect to have customers find (and actually want to go into) your store or office, you are going to have to keep aesthetics and crime in mind.
Businesses that operate in poor areas either attract few or no customers, or they attract low-income customers. By contrast, businesses in affluent areas attract a more upscale customer base. While this basic fact is fairly common knowledge, your franchise business plan is going to need to account for, not only where you intend to locate your office, but also how much money this is likely going to cost. Investors will pay a great deal of attention to cost items of this nature, so the business plan for franchise purposes is also a business plan for the satisfaction of your investors.
Your franchising business plan should say how people would know your business exists.
The third critically important part of your franchise business plan is going to be advertising. How you reach your customers is as important as who your customers are. If you use a type of advertising that your ideal customer will not see, your business will die. Since this is so important, in your franchise business plan, you absolutely must account for who you are trying to sell to, and how you are going to get them from being a non-entity, to a lead, to a customer, and finally to a repeat client and/or source of referrals.