Once you decide to purchase a franchise, it will be necessary to prepare a business plan, not only for funding purposes, but also as a guideline for running the business successfully. Moreover, the franchisor will require the franchisee to develop a business plan. The major difference between a business plan for a traditional start-up and a business plan for a franchise is that the latter must join essential items together from both sides; the franchisor and the franchisee.
Introduction
The initial portion of your business plan should contain a cover sheet listing the name and contact information for the business.Also, in the beginning portion of the business plan, prepare a statement of purpose which highlights the reason for the plan. Following this statement should be a table of contents listing all other portions of the business plan.
Business Description
The next step is to prepare a full description of the business, or business summary. This should encompass the identification of the product/service being offered, the market size and competition, as well as an outline of the operational method that will drive the business forward. Also, note any challenges that could possibly lie ahead. A good deal of information is most likely available from the franchisor via the company's brochure and/or website.Management
Next, provide an account of all the key players and their roles within the business. Their qualifications should also be included. It is best to include resumes and explanations of how their experience is relevant to the business.Marketing
The franchise business plan also needs to include details on how you plan to obtain customers for the business. List any competitive advantages you foresee the new business having. Be sure to highlight marketing and advertising strategies you plan to employ. Again, you may be able to reference the franchising company's website or brochure to obtain some of this information.Financials
You will need to prepare an income statement, cash flow statement, and balance sheet in order to demonstrate future performance projections. When compiling these statements, it is important to take into consideration any possible delays or challenges that may lie ahead.You will also need a section on financing needs even if you are financing the business entirely on your own. This will be a good indicator as to whether or not all operating costs can be covered until profit is realized.
The UFOC provided by the franchisor may offer some of this information. It may also be advantageous to consult an accountant for assistance.
Exhibits
The final section of the franchise business plan should include any additional pertinent information not included in the body of the plan.Overall, the preparation of the franchise business plan is typically less daunting than the typical startup plan, since many of the components are readily available via franchisor resources.
