Franchisees need business plans

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A business plan is a document that summarises the operational and financial objectives of a business. Additionally, it also gives a detailed outline of the strategies and budgets needed to realise the objectives set forth. In essence, it can be seen as the 'plan of action' of the company to ensure it progresses at a well-calculated and anticipated pace.

Unfortunately, many franchisees underestimate the point of a business plan and how it can enhance their success. Due to the nature of the franchise concept, the foundations for the business are in place, people generally know the brand and loyalty has been established. However, this does not automatically mean that the success of the brand will ensure the success of the franchisee's business.

Never too late to work strategically

A franchisee will find that preparing a business plan, while part of a franchise group, is more likely to succeed and is easier than if he or she was involved in an independent business. The franchisor typically has an arsenal of information and material available on the business, its competitors and the environment it operates in, which will guide it in the process of compiling a document that is both relevant to the brand it represents and its own business unit.

When compiling a business plan, a franchisee can include the following general elements to formulate an effective plan of action:

• Company description sharing detailed background information on the business
  
• Short and long term objectives of the company and how these will be met
  
• Detailed description of the brand's target audience - including demographics and psychographics
  
• Brand's marketing plan
  
• Operational plan that is needed to run the business smoothly
  
• In-depth financial plan that includes projections and budgets

The discipline of creating a business plan will force a franchisee to consider elements that could possibly impact on the business' effectiveness and it will formalise the projected course of action to steer the business in the right direction.

It is vital to remember that the business plan needs to be a 'working document', which must be updated and built on as the business progresses. In business, the constant is change and for a business to survive, it needs to keep up with the changes it faces. Franchising rules and regulations, agreements and processes will change and it is vital that a franchisee implements these into the business plan to ensure it is kept relevant.

The franchisor is there to help a franchisee to the best of its ability and should be approached throughout the entire life cycle of the business to build on and maintain healthy progress.