What is a Business Plan?
Starting a business can be challenging, so it’ s important to have a well-written business plan. A business plan helps you stay focused on your core business objectives and serves as a roadmap for your financial future. If you’re new to the world of business, you can use this guide to help you when making a business plan of your own.
What is a Business Plan and Why Do I Need One?
A business plan is a formal document that describes the nature and structure of your business. It contains specific data about your financial performance and marketing strategy.
Making a business plan can help you stay organized, especially when starting a business for the very first time. But you’ll also need a business plan to obtain funding. Most lenders will expect to see the data contained in your business plan before approving you for a business loan.
What a Business Plan Contains
There are several key elements to a business plan. If you’re starting a business as a franchise operator, your franchisor can help with some of the data you’ll need. A business plan will include:
The first page of your business plan should include an executive summary. This is a brief summary of the key points found in the rest of your document. Don’t worry about a lot of data in your summary since this will come later. Your summary should be roughly 250 to 500 words, which helps others quickly understand your business and its goals.
Even though this section appears first, it makes the most sense to save it for last when making a business plan. This way, you’ll be better able to summarize the rest of the document.
Next, you’ll provide some information about your business. This includes your business name and a brief description of the type of business you operate, including your products and services.
Be specific about the type of customers or businesses your company will serve. What competitive advantages does your business offer? Do you have any specialized expertise or training that sets your business apart?
The next section should contain your market research and possibly some competitive analysis. Most small business owners will have to invest their own time and resources into analyzing industry and market trends. But franchisees can rely on the marketing data that the parent company provides.
In fact, one of the key advantages of franchising is that by partnering with a larger company, you’ll receive the benefit of a nationwide advertising campaign, where your business will be featured on TV ads, internet posts, and more.
At the same time, this section can outline any specific efforts that you’ll use to market your business locally. Again, a franchisor can guide you in this process, helping you understand the marketing resources available to you as a representative of their company.
Organization and Management
This section will specify who will lead the business and what roles they play for most business owners. This can be particularly important in a partnership, for example, where each partner must adhere to specific responsibilities within the organization.
For franchisees, this section might explain your role as a franchise operator. Your franchise operator may be able to guide you through this section and help you articulate the rights and responsibilities stipulated in the franchise agreement.
Ideally, your business plan should provide a financial outlook for the next five years. This is based on your past financial performance in conjunction with current market or industry trends. You can also use this section to set key benchmarks or performance indicators you hope to reach each year or each quarter.
This is yet another area where franchisees have an advantage. The franchisor can provide you with insights regarding the performance of your franchise location and may even be able to offer guidance on how to set and achieve financial goals.
Not every business plan will include a request for funding, but it’s good to specify how much you’ll need to get your business (or franchise) off the ground if you’re just starting out. This is especially important when presenting your business plan as part of a business loan application. It will narrow down your needs and attach a specific dollar value to your plan.
Start Your Journey Today
Thinking about starting a business? Franchise Gator offers a locator tool that you can use to find franchise opportunities in your area. If you have further questions about starting and maintaining a franchise business, contact our team today.