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Monthly Archives: January 2017

The Franchise Business Plan

Business planning is very important for all businesses, and franchise businesses are no different. The business planning process helps ensure that sufficient thought is put into all aspects of the franchise. While it is tempting to assume that because a franchise is based on a successful, proven business model, it is guaranteed to deliver results once you are up and running, the reality is very different. All businesses need a business plan, developed to reflect their unique circumstances and to help them succeed, regardless of whether they are a franchise business or not. A business needs to have a plan with specific objectives, milestones, responsibilities and the like.

All business plans are different

The content of a business plan is shaped by its purpose. So if the intention is to use a business plan to raise finance, then the plan’s composition will vary from one being used predominantly to decide internal priorities, to allocate resources effectively, or to manage cash flow. Typical uses of business plans in the franchise context include:

  • Prospective franchisees looking for investment.
  • Franchisors looking for a business plan as part of the franchise sign up process.
  • Franchisees using a business plan to manage their business.

So depending on which of the above three business planning events is of most relevance, the content will vary slightly.

What are the key elements of a franchise business plan?

One of the benefits of franchising is that some of the challenges associated with a conventional new business are removed such as decisions regarding product, pricing, branding, marketing collateral, signage, etc. In essence you are acquiring a number of intangible elements which, in theory, should serve to help you reduce your business risk.

However, having these several elements optimised in advance in no way guarantees success. While these elements will help you in terms of brand awareness and will help ensure you have a compelling marketing mix, they still only represent a part of the overall picture.

If you are looking to raise finance, prospective investors will be keen to understand more about the management team, their investment, and also the cash generation prospects. Those franchisees using a business plan to manage their business will be more interested in the creation of a strong marketing plan as well as sales forecasts.

Ultimately it’s about an ability to generate cash

A business relies on its ability to generate cash flow at a satisfactory level so as to prosper. Hence the emphasis many franchise owners, place on cash flow generation, sales forecasting, and marketing plans when writing a business plan. The bottom line is that you will need to run a successful business, and this means attracting paying customers in sufficient numbers to generate a return on your investment. Naturally you will be able to receive some support from the franchisor as part of the franchise package. They should also be able to provide access to demographic information to help you with your analysis.

Many franchises are allocated on a territorial basis so you’ll need to have a clear feel for some of the following:

  • Demographic profile of the market (or neighbourhood) you will be serving.
  • Existing competition in the area.
  • Traffic/ footfall in the vicinity of the proposed store (if a retail premise).

It will be important to set financial goals and forecast the sales levels necessary to successfully manage your franchise. Franchising has become very popular in recent years, and many franchisors will have access to data which can help determine if there is a profitable market within a proposed territory. It will then be up to you to capitalise on this market opportunity by successfully targeting customers.

You will also need to be aware of local nuances as these can play a role in the success or failure of the operation. For example, when Starbucks® initially launched in Japan it was very keen to cater to local tastes and sensitivities. Recognition of these local factors such as menu make up, local branding, consumer tastes and cup sizes helped shape a unique Starbucks® proposition in Japan. Japan, along with the UK, are now key countries in the Starbucks® worldwide operation.

In summary, business planning is good business practise regardless of whether or not the business is a franchise. Even if the franchisor does not insist on a business plan it is recommended that you apply the key elements of business planning to your franchise to help you ensure its success.

The Business Plan Process

The business plan process is simply the steps you go through and actions you take when producing a business plan. In effect, it describes how you produce your business plan. While most people focus on the ‘final output’, i.e. the business plan itself, the business planningprocess is extremely important for entrepreneurs.

The process of producing a business plan forces entrepreneurs to examine areas of their business that typically may not be subject to much scrutiny. For example, entrepreneurs do not tend to routinely produce cash flow forecasts, so the requirement to produce one as part of the business planning process forces them to consider the impact of cash on their business.

The business plan process typically begins with an event, be it the need to produce a business plan when seeking investment, or to obtain short-term financing from a bank. Once a business plan is needed, the entrepreneur has to then decide how they are going to go about producing the plan. They will need to undertake the following:

  • Decide who is going to write the plan (if not themselves).
  • Gain an understanding of what a business plan contains.
  • Decide how to write their plan (typically using business planning software such as Business Plan Pro).
  • Ensure that they know the content for the various sections of the business plan.
  • Collaborate with partners or with colleagues from various departments (if the plan is for a bigger firm).
  • Make sure the financials are realistic and accurate.
  • Have someone review the plan.
  • Print and bind the plan (if a formal document is needed) and/ or produce a presentation.
  • Submit the plan to the recipient.
  • Update the business plan as new details emerge.

The great thing about the business plan process is that it forces the entrepreneur to consider their company holistically, as well as forcing them to consider their future, rather than merely the present day-to-day operations. Entrepreneurs who have spent the time thinking about seasonality in their sales forecasts, the implications of ordering and storing large amounts of inventory, or the short-term drop in productivity that comes with new hires, are less likely to be caught unawares by sudden cash shortfalls and other typical business challenges.

The Definitive Guide to Writing a Business Plan

What is a Business Plan?
A business plan is not just a document. It is a holistic analysis of your company, the environment it operates in, and a route map to achieving success based on the resources available. Unfortunately, the image most of us have is of a 30-page bound document.

While the business-planning process is in itself a very worthwhile pursuit, most business plansare produced for a specific purpose. For example, the business plan can be used as a means to convey an idea with a view to achieving a specific goal, e.g. securing funding. Hence it needs to be tailored with the audience in mind, and good knowledge of their unique requirements will help shape a winning plan. For example, the requirements a Venture Capitalist will have in assessing a plan seeking to secure a million-pound investment will differ considerably from those of a local bank manager who needs a plan to support a small-loan application. While the former will be primarily looking for capital growth, the latter will be more concerned with security.

Why do I need a business plan?
The following list represents some of the key reasons you need to produce a business plan:

1. To plan for an uncertain future

Business planning is vital to help you manage your business more effectively. By committing your thoughts to a plan, you can understand your business better and also chart specific courses of action that need to be taken to improve your businesses performance. A plan can also detail alternative future scenarios, set specific objectives and goals, and list the resources required to achieve these goals. In short, it can help ensure that you are prepared for all sorts of eventualities.

2. To help grow your business

In an ideal world, all businesses would be self-financing in exploiting business opportunities. In reality, few are afforded this luxury, and hence, many businesses will be required to secure external investment. The production and dissemination of a credible business plan is one of the primary means by which entrepreneurs access capital when they are seeking investment to grow.

3. To commit to a particular course of action

A business plan can help a company assess future opportunities, choose the optimal one, and then commit to this particular course of action. By committing to one opportunity, all other options are effectively marginalized and the company is aligned to focus on key deliverables which will help them achieve their goals.

4. To manage cash flow

Careful management of cash flow is a fundamental requirement for all businesses. The reason is quite simple—many businesses fail, not because they are unprofitable, but because they ultimately become insolvent (i.e., are unable to pay their debts as they fall due). Cash flow forecasting is an essential part of any business plan.

5. To ensure all bases are covered

How to write a business plan

Having decided to produce a business plan, there are three main ways to write one:

1. Pay someone to write it.

2. Write it yourself using Microsoft® Word and Excel.

3. Write it using a task-specific software product such as Business Plan Pro UK Edition.

If you, like many entrepreneurs, are time rich and cash poor, option 1 quickly removes itself from the equation, given the cost of having someone write a plan for you. Aside from cost, it is difficult to truely own a plan that someone else has written.

You are then faced with the choice between using Business Plan Pro® and building everything yourself, from scratch, in Microsoft Word and Excel.

Why are we not recommending other business plan software options? Because Business Plan Pro is the best business planning software available – without exception. Palo Alto Software (the maker of Business Plan Pro) has a long proud history developing the software, has had category leadership for years and has extensive lists of testimonials and independent reviews on the website, all corroborating this view.

Here are the reasons why we believe that using Business Plan Pro® is the best way to write a business plan:

1. Offers significant time saving
2. Provides the structure
3. Includes hundreds of examples
4. Ensures you do not leave out any sections
5. Makes the numbers part easy
6. Free Support Available
7. Signposts relevant resources at appropriate points
8. Designed specifically for producing a business plan
9. Risk free
10. Increases your chances

Finally, for most people a business plan is written for a specific purpose, such as securing funding. You should give yourself every chance of succeeding by producing the best quality plan that you can.

7 Business Ideas Poised for Success

Women’s health platform

Aspiring women entrepreneurs looking to make a difference are now in a better position than ever to launch businesses that help other women. An online store that focuses on women’s health needs, or another platform that connects women with important resources and products, could be a great framework for a successful and meaningful business.

Box subscription services

Box subscription services are popping up everywhere in the food, beauty and even pet product sectors, ready to deliver goods right to your door each month. One of the consumer perks is the idea that these subscription boxes are carefully curated just for them based on their likes and interests, and each month, the boxes’ contents are a surprise.

Find a unique product category that’s still untapped by the box subscription industry, or find a way to put a new spin on an existing service, and you could have a lucrative business on your hands. Keep it as inexpensive as possible — according to LearnVest, offering cheaper products will help you stand out from the competition.

Health clubs for millennials

Health and fitness services are being rebranded to become trendier and more sociable. Opening a health club or gym targeted specifically to millennials could be a great way to capitalize on the fitness trend, especially if you focus on creating a strong, fun and engaging social media presence to really connect with young members and potential customers.

Software training

If you’re proficient in a highly specialized software, you can get paid to pass your knowledge on to amateurs and professionals looking to expand their skill sets. Technical manuals are available for programs like QuickBooks and Final Cut Pro, but these are often expensive and difficult for the average user to get through. Schedule small group workshops or private sessions, and charge by the hour for a full tutorial of the program. The best part about this gig is that it can be done part time.

Health care consulting

As an independent healthcare consultant, you can offer management and data analysis for organizations like hospitals, labs and therapist offices to help implement solutions to improve efficiency and save money. If you have a marketing or economics degree, this is a great opportunity to put it to use.

Food truck

Want to start a food business? A truck is a much less expensive investment than a brick-and-mortar restaurant, and according to Mobi Munchfounder Josh Tang, the failure rate for food trucks is just 10 to 20 percent (as opposed to 60 to 90 percent for restaurants). With the right equipment and some great recipes, you can have your mobile eatery up and running in no time.

Mobile consulting

Mobile tech is now a must-have for almost any business, but finding ways to go mobile is a challenge for many business owners. If you can provide affordable mobile solutions to businesses that need them, you’ll find mobile consulting a rich business opportunity.

According to Jamie Turner, founder of The 60-Second Marketer, there will be an ongoing need for mobile assistance based on the increasing number of consumers with smartphones.

“If you’re in business, it’s your job to be where your prospects are. Your prospects are in mobile right now,” Turner said.