🕒: Four minutes
Writing an effective business plan is a key step in evolving your idea into a functioning, profitable reality. It sets out a clear idea of what needs to be achieved and how to go about this. It also forces you to anticipate the challenges that will inevitably come your way and solutions to any potential problems or hurdles that may be encountered.
What should a good business plan include? And how should you best present it? Franchise Direct examines the importance of a good business plan and how to prepare one that delivers all the critical elements.
Why is a Business Plan Necessary?
Becoming a franchisee offers a certain degree of security, and is in many ways less risky than starting your own business. Entering a proven model with support and expertise at your disposal can obviously be an enormous advantage.
However, these benefits don't mean that a business plan is not necessary. Although you may be entering a proven, successful model, it's up to you to ensure your business works, and you should take every step possible to help make that happen. It's up to you as a franchisee to establish, develop and grow your business. A strong business plan can be the first part of this process.
Key Elements of a Business Plan
Business Description
Provide an overview of the business/franchise, outlining the sector it will operate in, the goals and ambitions, summary of the business and a description of what it is that separates you from market competitors, including:
- A mission statement
- Summary of the business
- Legal description
Management
Provide biographies of the main members of the business, including yourself. Details relating to:
- Education
- Prior positions and experience
- Noteworthy achievements
Marketing Plan
An overview of the industry you will be competing in, the demographic you are targeting and how you plan to sell and promote your business/product to that demographic. This section should examine:
- The industry you are entering
- Potential customers
- Advertising plan
- Public relations
Operations
A breakdown of how the business will run day to day, how you will organise your team and what resources will be needed. It should include an overview of:
- Employees
- Outside resources you intend to use
- Accounting and bookkeeping
Risks
Identify the potential pitfalls, be honest with yourself and candid enough to acknowledge that you will run into difficulties from time to time. Being prepared for such problems will make it easier to handle them if they arise.
Financial Management
A projection of your income and expenses that will allow you to foresee any financial ebbs and flows, equipping yourself with a plan to deal with any potential issues. It should include:
- A profit and loss statement summarising estimated revenue and expenses over a specified period of time
- Balance sheet
- Cashflow projections
Flexibility
Writing a good business plan is crucial in converting a business concept into a reality. Once written, it can always be revisited and amended. As you embark on your business venture, some of your goals and circumstances may change; maybe you'll want to tweak your marketing strategy, broaden your target demographic or adjust your expenses. As your company grows, your goals and ambitions will inevitably evolve.
Your business plan is the blueprint to your success, but that doesn't mean it's a rigid, inflexible document that you need to adhere to at all times. It's there to help you set out a clear path to get to where you want to be, as something you can always refer to along the way, but also as an adaptable tool that can be adjusted to suit your own growth as a franchisee.
Tips For Writing the Perfect Business Plan
- Short and simple: A concise, user-friendly plan can be digested and viewed quickly and easily. Make it accessible, easy to understand and to the point.
- Interesting and appealing: It doesn't need to be a boring, stale document – feel free to use graphics, colour and images to bring your plan to life. Aesthetically, this can make your business plan look more attractive, but it can also help to illustrate certain aspects of the plan more effectively, highlighting key areas of interest and sections to focus on.
- Honesty is the best policy: There's no point in ignoring potential challenges and obstacles you may encounter when planning and operating your business. In fact, it can be better to envisage the worst-case scenario you may experience in order to prepare yourself to handle any problems. Be honest with yourself in terms of weaknesses too; this will improve your credentials as a business owner in the long run.
- Don't spare the details: Your business plan is a reflection of you and your business, so make sure everything is done right; accuracy, clarity, perfect spelling and grammar and realistic targets are essential components.
- Use another pair of eyes: It makes sense to get your plan looked at by someone not attached to the business who can offer informed, constructive criticism. They'll be looking at it from a different perspective and may pick up on things you either missed or failed to consider.