For many savvy business owners, expanding operations into a franchise can be a natural evolution. It allows owners to have more locations and reach new customers without the responsibility of overseeing each store on his own.
Taking the correct steps to plan for this expansion is critical for making a franchise take off successfully. After figuring out the logistics and getting the resources together to begin franchising, owners will need to craft a business plan to bring in investors and get buyers to sign on to run one of the new locations.
"A set operational plan will help business owners achieve their goals."
The benefits of a good business plan
There are many reasons to craft a business plan before expanding into a franchise. According to Entrepreneur, a set operational plan will help business owners achieve their goals. Having a detailed list of their goals and missions will compel them to develop a more focused approach for hitting their benchmarks.
Business plans are also useful for attracting investors and buyers for the franchise. Buying into a franchise is a big commitment and buyers will only invest in one if they understand what the company's goals are and the plans in place for reaching them. Franchises also need to have unified marketing and operational strategies. Writing these out in a business plan will create cohesion across all stores.
What to include in a business plan for a franchise
Franchising recommends that a business plan start with a summarizing introduction that describes the business and the service it provides. The purpose of a business plan is to help sell people on the idea of the organization. A majority of people are skimmers rather than readers, so it's important to hook them quickly by immediately getting to the heart of the matter before they lose interest and stop reading.
The source also states that a good business plan will define the owner's management style, marketing strategies and financial forecasts.
Additional recommendations from Inc. magazine suggest that hopeful franchisors determine a realistic return on investment projection. This is an important part of the financial forecast to help buyers and investors know what to expect from their contributions. Backing up these projections with examples from the existing business locations will provide an important base model for boosting people's trust that franchising the company will be successful.
How to write a business plan
Franchisors need to focus on their audience when writing these plans. These documents need to help business owners have an outline of their goals and plans to run the company, while convincing other people to invest in the company. Make sure that facts and figures are accurate, that the spelling and grammar are correct and that the writing is direct enough to hold people's interest without bogging the reader down in complicated, unnecessary details. Simple errors will give the impression that the writer doesn't pay attention to details, which could be a significant turn-off for potential investors.
By carefully crafting clear and compact documents, business owners increase their chances for finding the right team of people to support the franchises' growth.
Equipment and franchise industry piece brought to you by Marlin Equipment Finance, a nationwide provider of commercial lending solutions for small and mid-size businesses. Marlin's equipment financing and loan products are offered directly to businesses, and through third party vendor programs, which include manufacturers, distributors, independent dealers and brokers in the security, food services, healthcare, information technology, office technology and telecommunications sectors.