Business Planning

Most businesses have an understanding of the importance of a comprehensive business plan. Without a plan, a business will usually find it difficult to obtain funding and, going forwards, can run into a whole host of problems. Writing a business plan is a big task and an ongoing process, but it is manageable.

Many prospective franchisees ask why they have to bother with a business plan at all and some even think that it is just a time- wasting exercise to keep the bank manager happy, but never could a franchisee be more wrong. Effective planning ensures that your businesses is on track and serves as a guide for both growth and succession planning. 

Business planning is a valuable tool for starting and succeeding” – Mark Scott  

It is understandable that someone new to business could find the prospect of writing a business plan daunting, but it is essential and does not have to be difficult. The time you invest in your business plan will pay off later on in the journey.

Some of the key benefits include:

• A clear direction and vision for your business, including a road map and timeline for achieving your goals
• A set of values and goals that can help you through challenging times
• Benchmarks to track performance as well as any marketing strategies
• Analysis of your industry and the opportunities and challenges that could arise
• An overview of your marketplace and target customers and what their demands/habits are
• A profile of your main competitors and your strategies for facing them
• An assessment of your company’s strengths and weaknesses
• Projection and analysis of your revenue, cost and profit

A strong plan will look at all the aspects involved in running a franchise, from the market in which it operates to the price of the goods sold. A good business plan can be the key to unlocking any financial support you need outside of your own resources. It is also important for your own use to track whether you are meeting key milestones and that all is progressing as expected.

It is essential that once written, reference be made to it from time to time, to ensure any falling trends are adjusted as soon as possible and with the assistance of the franchisor. The franchisor should be interested in the performance compared to plan, as their income should depend on the success of your business.

The best ones include:

• Details about the franchise 
• The sector it operates in
• The competition, both locally, regionally and nationally
• Your marketing plan
• The costs
• 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 into the business.

Although still a vital part in planning and strategy, a business plan for a franchise is often very different to that for a completely new business. In many ways, franchisees are at an advantage compared to regular start-up businesses in that they are able to demonstrate figures and performance for real-time comparable business examples.

A franchise business plan needs to reflect what actual numbers other franchisees in the group are achieving. If your business plan predicts £1million in two years then you need to be able to evidence another franchise in a similar area that has produced those figures. You will need to check with existing franchisees the levels of turnover and profit they are achieving in order to evidence the potential.

Good research is vital and, together with planning, is just common sense. You need to be clear about what your 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 in order to achieve their objectives.

Having a business plan is not just relevant at the start of the franchise, it is just as important as the franchise develops to keep on top of the plan. You should 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 that can be presented to the bank or the franchisor when thinking about expansion.

The most important thing to remember is that a business plan is there to put you on the road to success, and keep you there.