A professionally prepared business plan will reveal both the strengths and weaknesses of any business. It can warn of particular pitfalls, or confirm whether the opportunity is right for you. Once you have started, it will also help you monitor your progress month by month, year by year. If you need to borrow money, the business plan also serves as a persuasive and factual document which will help your lender to better understand your aims, and demonstrate that the business will be both viable and successful.
Your plan should include the following sections:-
This section should address these fundamental issues:-
It should also provide information on pricing and costs, suppliers, premises and equipment, marketing and promotions. If your business is a new venture, or if you've never before been in business for yourself, you will need to explain how and why you intend to start up your business and outline any relevant experience you have.
Every business requires capital - for starting up, for running the business in the first year, and for expansion later. Your business plan should include all relevant financial information and state how much you want to borrow (if anything) and for how long. Your plans should be supported with forecasts for both cash flow and profit and loss. These will help you and your lender determine how much you can sensible borrow, what kind of financing you'll need, and what repayment scheme is best suited to your cash flow requirements or income pattern.
The profit and loss forecast will enable you to plan ahead on the basis of the sales you think you will achieve, the costs of the materials and supplies needed to make those sales, and the resulting profits earned. Starting out as a franchise is much the same as starting in any other type of business. Your costs are going to be higher in the first years because you need to invest in equipment, stock, fixtures and fittings.
Making a business plan will help to determine whether or not the business is the kind of business you are going to feel happy with, how it will operate, and of course, whether or not it s financially viable. Maintaining it will help to ensure that your business stays financially 'healthy'. A professional business plan will also be helpful to you if you need to borrow money - it will show you and your lender, how much money is needed and how it will be repaid.
