Owning a franchise requires an investment of capital and many prospective franchisees don’t have sufficient enough capital with which to cover the initial startup costs. In cases like this, the franchisee will need to seek out financing from a third party source and that means devising an effective business plan.
This document is a way of approaching potential lenders and investors to convince them to help you come up with the money to get that Chem-Dry franchise off the ground. The plan is your way of explaining your vision for the business as well as when and how you plan to turn a profit.
Some franchisors will also ask their potential new owners to develop this plan before they are even approved to join the franchise company. Not every company imposes this requirement but, in order to be fully prepared and present yourself as a viable and organized candidate for franchise consideration, you will only help your cause in being authorized to be a part of the network.
It’s a useful way to have every question answered before the franchisor even asks, demonstrating your extensive knowledge of how the franchise works and how you plan to take on any and all challenges that come with owning a franchise business or franchising your business down the line.
Every business plan is different, based upon the business, operational structure, and break even period inherent to that particular enterprise. But most business plans are outlined in much the same fashion regardless of the specific type of endeavor being discussed.
When you are creating your plan, these are the most common portions that you will need to include as part of the document:
This part of the plan is a brief description of the business you are planning to open. It includes a brief definition of the product or service you are going to offer to the public, the marketplace in which that item falls, and a brief explanation of how your business will introduce that thing to market. You are also going to address some of the risks and difficulties inherent in starting this type of business.
Here is where you are going to write a brief summary of the plan itself, not the business or product/service. In other words, a reader can get the gist of the entire plan and what it entails just by reading this summary. It offers the basics that you will expand upon later in the body of the plan. This portion is typically written after the plan is completed and it should entice the reader for what’s to come.
This section of the plan outlines who the key management personnel will be in the operation. You will describe each position and its importance to the business. This portion will also have the names of each individual who will be filling those positions, including all of their relevant background information such as bios, resumes, press clippings, and so on. Be sure to add anything that will make the reader feel reassured you have the right people for the job on-board.
You will describe how you plan to market the business to the public. Bring all of your ideas and strategies to the table and explain as succinctly and clearly as possible how these strategies will provide the business with a competitive edge in the marketplace. You can even describe the challenges that will present themselves and how you plan to overcome them.
Here is where you will outline all of your projected financial components from cash flow to income to the expected financial health and performance of the business in its initial stages of operation. As a franchise business owner you should be able to point to examples of similar anticipated success with other franchisees in the network. But always remember to be conservative in your projections as there are always unexpected obstacles that might come up.
Now the part that your investors have been waiting for….how much you’re asking them for. Be sure you provide a detailed, specific, and reasonable analysis of all costs, fees, marketing and operating expenditures and any other startup expenses that you need to raise in order to get the business off the ground successfully. The more detailed you are here; the more comfortable your potential investors will feel about getting involved.
Remember, you want to be as descriptive as possible in all of these sections, but the funding portion is particularly crucial.