There are a few things you’ll need when opening up a franchise. One of these things is a business plan. The business plan allows you to carefully think about your investment. It can help you make the right decision for you and set you up for better success. It’s also required for lenders to approve the loan, if you’re going to need to borrow money for the franchise opportunity. But what exactly is included in a business plan?
The nice thing is that you’ll be able to gather a lot of the information you need right from the franchisor. They’ll be able to provide you with information that includes the target demographic, what makes them competitive in the market, what type of marketing initiatives they have in place and what the costs are (now and ongoing). They’ll, of course, also be able to provide you with information about the company and its background. All of this, will make it much easier to put together your business plan for the lender.
The lender will want to see the following things in your business plan.
- The estimated costs.
- The projected return on investment (providing a 3-5-year projection is a good idea).
- A description of the business and what they offer.
- What the target market looks like, what type of competition is there and a forecast for potential growth.
- A plan on how to market your services/products.
- How you’re paying for the investment and what your current financial standing is. In most cases, you won’t be borrowing all of the money from a single lender to pay for a franchise, so they’ll want to know where you intend to obtain the rest of the money.
- What the plan is for management; they’ll want to know whether you’re going to be a sole manager or if you’re going to share ownership with someone else. They’ll also want to know what the day-to-day management will look like.
Walking through the business plan will allow you to think everything through. You’ll get a better understanding of what your franchise will look like and the potential for success. It also shows the lenders that you’ve done your research and know what you’re getting into.
Make sure that your business plan is carefully written. A business plan shouldn’t just have all the important details, it should be written well, free of grammatical and spelling errors. You also want to pay attention to the length. You don’t want something so short that it doesn’t represent all of the details the lender desires to know. You also don’t want it to be so long that it’s overwhelming to read. Typically, these plans can be around 20 pages.
If you’d like to know more about franchising and what is involved, please connect with us: . We can help you find the opportunity that fits you best and walk you through the next steps.
