Entrepreneur and five of the Franchise Business Plan

Entrepreneur, In a franchise business, you’ll probably find that the preparation of the business plan is substantially easier than for any other type of independent business start-up. The franchisor typically has a great deal of verbiage readily available to include in the narrative portions of the business plan, and also includes much of the financial information you’ll need in the disclosure document.

By way of background, there are a number of sections included in a typical business plan, whether franchise or other. The main sections include:

1. Introduction. A complete description of the business, including an identification of the product or service involved, the size and competitive nature of the market for the business, a description of the operational approach used to take the business to market, and the challenges and risks associated with the business start-up.

2. Management. A description of the key management roles in the new business, including naming the persons who will fill the roles and providing background information on these people, such as resumÈs stressing prior experience relevant to success in the new business.

3. Marketing. Explanation of how you’re going to attract customers for the new business. This includes an explanation of the competitive advantages the new business would enjoy, an examination of the value equation related to the product or service as it relates to potential customers and, of course, detailed marketing and advertising plans for the business.

4. Pro Forma Financial Projections. Income statements, cash flow statements and balance sheets that project the anticipated financial performance of the business when it begins operation. The statements should include extensive notes concerning all material assumptions used to prepare the projections. These projections should always be prepared on a very conservative basis, since it’s not possible to project the unexpected delays or challenges that always seem to happen with any new business start-up.

5. Financing Needs. Regardless of the source of funding for the new business (even if all funding is coming from your savings), you should always prepare a section of the business plan related to financing needs. This section involves a complete analysis of all start-up costs related to the new business, including sufficient working capital to cover initial marketing plans and operating losses until the projected break-even point for the business. The process of carefully detailing this information, even if you’re not borrowing anything from an outside source, will better prepare you for whatever might happen as you get the business set up and operating.