The importance of a comprehensive, well-structured and well written business plan should not be overlooked. It is a document that is vital to a franchise business, containing information such as objectives, strategies, projections and analysis. Recognising how crucial a business plan is, both at the start-up phase and throughout the journey of a business ownership, is a must.
Here are 3 key reasons why a franchise owner should have a business plan:
- A well-developed and well-executed business plan will demonstrate that the owner has excellent industry knowledge and a full understanding of the franchising sector. They have completed extensive research and can display in-depth market comprehension. Formulating this in a single document demonstrates credibility and can be presented to external companies such as lenders to help secure business finance.
- Going through the process of creating a business plan will help the owner to correctly shape the structure of a business whilst also recognising growth opportunities along with the challenges they may face. It will define target markets, evaluate competitors and formulate marketing strategies whilst also helping to anticipate obstacles or barriers to growth.
- The business plan will outline the direction which the franchise will take to achieve success and growth. Using the document to track progress means the business can adapt to any changes in the market or changes in customer demand.
In order to create such a compelling business document there are some essential components that need to be included:
- A detailed insight into what the business will be delivering, why there is a need in the market for it and how it could be an excellent investment opportunity. In short, the must haves to be included are target markets, competitive proposition and potentials for growth.
- Strategies in regard to marketing and sales focus need to be accurately defined. Detailing how potential customers are going to be targeted, signed-up and then maintained. A clear pricing structure, with profit margins are important along with budgeting to ensure spend can be allocated to marketing and brand promotion.
- Continuing with the line of budgeting, financial projections are another very important element. A key concept here is that everything needs to be realistic, of course it will always be a prediction, but revenues, expenses and profitability should be set with as much accuracy as possible. This way the business owner is always demonstrating credibility.
- Finally, be clear with the strategies needed in order to fulfil growth. Considerations should be given to the opening of additional locations, introduction of new products or services and the entering of new markets.
Here at NGI Franchise Funding we have a specialist team of business planning experts who are on hand to help with the development of business plans.
If you have any questions or would like some help with generating a business plan please feel free to call us on 01993 706403 or e-mail hello@ngifranchisefunding.co.uk.