Richard Holden explains how the right business plan can make the difference between success and failure
Richard Holden (pictured), Head of Franchising at Lloyds TSB Commercial, believes that the devil’s in the detail when it comes to securing bank finance.
A business plan is a prerequisite for any franchise owner looking to launch a new enterprise, or expand an existing one.
A well-written plan should focus on key objectives, setting realistic and attainable goals. It should be seen as a work in progress, rather than a static document and should be subject to a regular review based on the evolution of the business.
There is plenty of advice available - from lenders, professional advisers, fellow franchise owners and also the franchisor.
Lloyds TSB Commercial is one of the leading providers of development and start-up finance for franchise businesses, the bank is committed to building on solid foundations and working with good management teams, to enable success.
A wealth of knowledge built from working with successful businesses across a variety of sectors, means we understand the intricate nature of how franchise operations work and the challenges that business owners face.
It comes as no surprise, given the economic conditions and the financial pressures facing businesses over the last five years, that the franchise sector continues to play a huge part in helping to re-balance the economy of the UK.
Interest continues to increase in franchising as an opportunity for flexible self-employment, well suited to a range of individual circumstances.
As the franchise industry has expanded, competition amongst owner-managers has increased. A good business plan will go a long way to helping individuals secure finance, yet it will also act as a reference point through what will be a very busy time, setting out key objectives and the timescales involved, following the launch of the new enterprise.
As well as providing a concise, yet comprehensive look at the basic structure of the business, including an overview of the franchise, the plan should set out short term objectives as well as longer term aims.
This will enable the lender to look at what you want to achieve and more importantly how you aim to do it. The plan should also provide financial information, outlining the capital investment that is required in order to launch the new business.
No business plan is set in stone; any forward looking strategic document should incorporate an element of flexibility, taking into account market knowledge, key trends and regional differentiators and the effect those outside influences could have on the business.
New franchise owners have the potential to utilise the experience of the franchisor and even existing franchise owners, when considering their business plan. Once finance has been secured, this support should be further utilised in the early stages of the enterprise.
Regardless of how well a business plan is written, the manner in which it is presented is crucial. Pay attention and focus on the key messages within the plan. The old adage practice makes perfect is true in this case; honing presentation skills and tailoring an approach to a specific market that meets with the objectives of the business are both key elements of portraying the business in a professional and positive light.
Franchise operations have the potential to succeed for a number of reasons. It’s not simply about maintaining a strong business model; it also has a lot to do with the ability of the individual to act as a driving force behind the franchise.
What’s more it’s not just traditional franchise opportunities that are continuing to bear fruit; all sectors are benefitting from the track record of success associated with the proven business reputation of existing franchises, from care to retail, fast food outlets and beyond.
Choosing a well-established franchise operation will give you a head start. While there’s no guarantee of success, a well-structured business plan will undoubtedly provide the foundation for future growth.