How to Create a Business Plan for Your New Franchise A Step-by-Step Guide
Writing a business plan is daunting, particularly if it’s for starting a new business or franchise. Knowing where to start isn't easy if you’ve never written a business plan. Even if you have written one before, every business plan is different and personal to the new business; different services or products, market, organisational structure, market analysis and financial projections.
Your business plan is the launch pad for your business and is crucial if you are seeking funding from a bank or investor. Of course, that doesn’t mean to say people haven’t been successful without a business plan. However, it gives your new business or franchise the structure and grounding for success and definitely helps towards a profitable business.
But where do you start? What needs to be included in your business plan, and how do you go about creating one for your new business or franchise?
What is a business plan?
If you’ve never created a business plan before, let’s give you a bit of an introduction. Your business plan is the document that describes your business, its products and services, and details the management and staffing, how it will operate, how it will earn money (and its outgoings), and other essential information.
Having a business plan in place gives you the basis on which you can build your business. It maps out the details of your business concept and marketing strategy. If you are planning on sourcing funding from a bank or investor, they will expect you to present a business plan. They use this document as an assessment of your business as part of their risk analysis and evaluate the feasibility of your business before lending funds.
The business plan format
The most common types of business plans are:
Traditional or working plan – this is the long, detailed business plan. They take time to write, can extend into dozens of pages and are extremely detailed. Most investors, particularly venture capitalists, will ask for this type of business plan.
Lean or mini-plan – this is a shorter version of the traditional/working plan. It is formatted in the same way but just carries far less detail. It is quick and easy to read, ideal as a reminder of your future plans and is a useful tool for existing and new staff to give them an overview of the business and its growth strategy.
Non-profit plan – as the name suggests, although it is formatted in the same way as a traditional/working plan, or even a lean/mini plan, but for a non-profit entity in the public or social sector. It includes a section on how the non-profit business plans to make an impact in the public or social domain. Funding donors will expect to see this type of plan.
As well as writing out our business plan, it’s also a good idea to set it out in a PowerPoint presentation. For example, you can use the presentation to show prospective investors the key points of your business, from your mission statement and concept through to growth strategies and financial forecasts, in 20-30 minutes. You can then leave them with a more detailed plan that they can review at a later date.
What should be included in your business plan?
Of course, all business plans differ depending on the business type. However, there is a set of basics that all business plans should include:
Business markets, including a SWOT analysis
Management and personnel, including structure.
Service or product offered.
Marketing and sales.
Operations and logistics.
Steps to creating your business plan
So, now you know what should be included, it’s time to get to work on your business plan. Here are eight steps to help you, and it doesn’t start with your executive summary; this is actually the last section to write as it is a summary of your entire business plan.
Step 1 – Company description
This section describes your business, and to help you, think about the 5 W’s – Who, What, Why, When and Where. Include your business background, model and industry, your vision, mission and value proposition, short and long-term objectives and key personnel.
Step 2 – Include the market/SWOT analysis
Detail your market research and add a SWOT analysis that shows your business’s strengths, weaknesses, threats and opportunities. Include an overview of your market, where your business is positioned in the market, an overview of the competitive landscape, your potential market share and your conclusions.
Step 3 – Management and personnel structure
Set out your business’s management structure and key personnel within your business. Add their job titles and a brief overview of their roles. A great way to show this visually is by adding an organisation chart.
Step 4 – Your service or products
Set out the services or products you are planning on selling. Include the details, pricing and how many products or services you can sell. Detail your product/service launch, don’t forget the intellectual property you own, how you source materials or suppliers and delivery information.
Step 5 – Set out your marketing plan
When it comes to marketing, don’t forget the 4 P’s – Price, Product, Promotion and Place. Your marketing plan sets out how you plan to market your business. For example, if it’s an ecommerce store, you may be considering promoting your products online via social media
and Google Ads campaigns.
Step 6 – Explain the operations and logistics
Whether it’s a service or a product business, you will still have a level of operations. This may be suppliers, facilities and equipment, packaging, fulfilment and shipping, production and inventory. By setting out these details, you are demonstrating a solid understanding of how your business works.
Step 7 – A financial plan
A key part of your business plan is your financial plan. Use a spreadsheet, graphs and diagrams to show your planned incomings and outgoings. Include a balance sheet (it may be predicted), a cash flow statement and a profit and loss statement, if you can.
Step 8 – Write your executive summary
This really is the last step because it outlines your business in a summarised form. Any potential investors or funding lenders should be able to get a good understanding of your business plans from the executive summary. So, make sure you highlight the key points you’ve covered in your business plan sections. Also, make sure you include an exit strategy and keep it balanced.
Writing a business plan is not the easiest task, particularly if you’ve never done it before, and there are templates online that you can use as a basic format. Make sure you have a clear goal and always take the time to research your product/service and the marketplace. Don’t waffle; keep it to the point and concise; investors and lenders are busy people. Another important factor is to read it through several times to avoid spelling or grammar errors; mistakes like this will reflect badly on you.
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