A Business Plan is one of the most important documents for a franchisee. It provides a guide to whether your franchise business is going well or under achieving. It is essential that once written reference is 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.
So, do not just look at your business plan purely as a passive speculative or historic document. Don’t forget about cash flow. If you run a franchise in the business to business sector it can take up to 90 days. This means that a good billing month will take about two to three months for you to experience the cash benefit. This is very important to understand when planning when to spend money or when you might need to utilise an over draught facility.
Before the Bank is willing to lend, a business plan will be required and should include the following:
• 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 • 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 in to the business. However a Bank Manager will also assess this during a face to face meeting. Understanding of the market, franchise and your enthusiasm and belief in the franchise system are therefore vital.
If you are buying an existing franchise business the bank would like to see the past financial performance; the last 3 years accounts would be helpful.
Many franchisors will assist in completing a business plan, however the bank will expect you to know and understand the various statements and financial figures it contains. There will undoubtedly be questions about parts of your plan. The financial information, particularly the forecasts, will help you to assess the performance of the franchise in the early months.
The main lending banks such as Nat west and HSBC have a Start-Up Planner, which can assist in completing a plan, should a template from the franchisor not exist.
www.selectyourfranchise.com offers the franchise seeker a wide range of franchise options to research. From over 140 UK franchise opportunities you may us the quick search options available to narrow down opportunities that meet your requirements before taking further investigative steps.
The Franchise Business Plan - To learn more about this author, visit Nick Strong's Website.
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