The Franchise Business Plan (Pt III)

Date AddedNovember 26, 2009 06:58:23 AM

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Continued from The Franchise Business Plan (Pt II)

WHEN UPDATING YOUR BUSINESS PLAN, FRANCHISES SHOULD KEEP IN MINDTHE FOLLOWING POINTS:

• Trading cycles, costs and expected cash flow should be reviewed and reassessed. If you believe that the tightening market will affect one of these aspects, record it in your business plan. There is no use planning for a best case scenario; franchisees need to plan for the reality of their environment.

Develop a strong and effective business relationship with the franchisor. Working in partnership to develop a united business plan, based upon common goals, is vital if franchisees expect to succeed.

Take the opportunity to examine all aspects of your business plan.Business plans are fluid instruments, and no aspect of your plan should be irreproachable. If aspects of your marketing or branding techniques are proving ineffective, examine and employ new strategies.

• Get support and advice from your business peers and experts who have an in-depth knowledge of finance and business. Planning around a changing business environment can be challenging, so utilise all of the resources available.

IS IT IMPORTANT THAT I HAVE A SIMILAR PLAN TO MY FRANCHISOR?

Franchisors often develop generic business plans for their franchisees, so as to ensure that individual business goals are in line with the direction of the entire system. However, it is important that the planning process is a collaborative exercise in which both parties express their ultimate vision for the business. Whilst there may be certain guidelines that need to be adhered to, it is important that the plan for each franchisee is individual.

Every business encounters its own unique opportunities and challenges, and it is important that these issues be refected in a localised business plan. Each franchisee should be viewed as a unique business, and for a plan to be effective it needs to be as unique as the business itself.

Where there is no existing generic plan, the ultimate success of any franchise operation is reliant on the working relationship between a franchisee and franchisor. Developing a business plan provides an opportunity for both the franchisee and franchisor to explore potential strategies, which can be adopted as part of the plan, and provides for a unified map from which both parties can work.

Franchisees should also aim to utilise the experience and knowledge of their franchisor, especially in some of the more practical areas of business planning: forecasting expected cashng cycles and start up costs. In business nothing is as helpful as practical experience, and any resource which can assiste the formulation of a business should be seized. In addition, your specialist business banker to the franchise industry should be engaged as early asthe process. If it's a bank that has accreditation or knows your particular franchise system, they will be used to working with franchise businesses like yours.

CAN A BUSINESS PLAN HELP A FANCHISEE GROW?

Even though the business environment may be difficult to navigate now, all should still aim to consistently grow. Whilst all businesses need to be careful not to outgrow their financial means within the slowing economy, franchises need to position themselves to take advantage as soon as the economy swings. Implementing an effective business plan now, can significantly increase the probability that your business will be ready to reap the rewards of a financial spring. A business plan should not only help you consolidate in the difficult times, it should help you grow when times are good.

HERE ARE SOME TIPS TO HELP ENSURE YOUR FRANCHISE IS WELL POSITIONED TO GROW WHEN THE OPPORTUNITY ARISES:

• All franchisees should have a localised marketing strategy incorporated into their long term business plan. A marketing strategy which understands the buying habits of local customers is vital, if you are planning to expand your business.

• Franchise owners should be aware of how they plan to grow their business when the opportunity arises. Businesses need to know how they are going to best utilise their assets

to achieve the desired growth. Even if you are not growing at the moment, franchisees should plan their growth strategy early, so they can implement it at the first opportunity.

• When planning ahead, it is important that franchisees do not lose sight

of their current situation. Avoid the temptation to tailor your whole business plan around the opportunity to grow. Remember, in order to grow, franchisees need to survive the current period.

For more information go to
www.nab.com.au/franchising