When you are certain about investing in a franchise, having a grip over the next step gives you brownie points. Knowing what comes next is more assuring. Since you are reading this article, it’s fair to say that you have made your research if the franchise business is your ball game, sticking to a particular franchise unit and finally planning the setup! Before anything, know that finding a way around finances is a milestone in your franchising journey. Not everyone is born with a silver spoon, and also it is inevitable to consider, that not everyone will invest in your business entirely and that you will need to start with a minimum monetary accumulation to kickstart.
Convincing the investors, or any money lenders take solid efforts, and vision accompanied by strong numbers and figures. That is where a business plan comes into action. A business plan consists of every minute detail of the franchise you are investing in, projections, timelines of returns on investments, and many more meticulous details.
What does a BUSINESS PLAN have to do with an investment proposal?
- A business plan gives assurance to the investors that they will have their returns on the investment within a specific period.
- A business plan gives the investor/lenders to assess whether the principal involved, the strategy and the business will steadfast ruler in the market and how much they will be profitable when it does.
- A business plan gives the investor/lender a sense of calculated approach and helps entrust them with their valuable assets, money, and time, in you operating the franchise business.
Having said all of this, having a great business plan comes with a set of advantages that will put you ahead in the business world:
- A well-planned business plan provides a vision to work towards. It allows speculations to take shape and predict exactly where you are heading with the current product that the business is built on.
- A business plan is groundwork that shows one has serious intentions with the business. It helps the financial institutions to hand entrust in the business and makes the business eligible for credits.
- A business plan puts everyone on the same page. Working with a team with varied opinions and imagery for the business wouldn’t help the business at so many levels. It gets important for everyone to get lined up with similar ideologies for the business.
Steps To Mould A Business Plan :
The franchise provides a Franchise Disclosure Document (FDD). This is a legal document that allows the franchisee to have full disclosure of the company’s products and services, and marketing goals as well as a documented source that can help assess the stature of investment in the business.
- Franchise description
- Product Description
- 360∘ Market Analysis
- Marketing and Financial Management
- Investment Projections
- Strategic Timeline
While most of the information can be acquired from the FDD, there is some additional work that needs to be done from the franchisee’s end. The then market structure, investment, and expenses throughout the projected period, and how early can the business meet break-even to start extending profits to the investors, are all of these be of topmost priority to the franchisee.
At the end of the day, when an investor is putting down his/her money, he/she would want to do so in a profitable business. Any business plan that can enlighten the probable investors/lenders with the brighter side of the business, and accord them with the sought-for amount for investment would have a strong business plan built into the framework of the business. While pacing with changing times, business plans also need to be adaptive for glorious results.
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