A solid business plan forms one of the key foundation stones for your business. As well as being a vital tool for securing funding, it details what the business is, how it’s financed, managed and operated, and how it plans to grow in the future. At Home Instead, we treat our franchisees as partners. We’ll help you with most of the information you need to draw up your business plan – as well as supporting you as you strive to achieve your objectives. Much of this information will be in the Franchise Disclosure Document (FDD) we’ll give you.
The business plan will provide you with a clear guide of the key challenges you’ll face, and your chosen solutions, as you launch and develop your new franchise. There’s a fairly consistent format for plans – make sure the one for your home care franchise includes the main items we’ve outlined below. It should be clear, compelling and fairly concise. In the future, you should continue to update your business plan so that it remains relevant to any new issues, needs or objectives that arise.
This introduction provides a brief summary of what your new business is, your vision for it, how you plan to achieve this vision, and your projections for the future potential of this business.
In this section, you need to explain why you want to start your franchise. It enables you to outline your mission statement and key objectives. These should include an overview of the business itself, the success of the franchisor, and the products and services you’ll be providing to your clients (although, if required, you can provide further details in a special Products and Services section of the plan). You also need to show an awareness of current market trends and how your franchise can either capitalise on these or overcome any negative trends. You should be able to find a lot of relevant information within Item 1 of the FDD provided by your franchisor.
Keep your summary brief but powerful. It’s a chance to explain any particular strengths or expertise you can bring to the business and any further training you might want to pursue (in addition to that provided by the franchisor). You can also briefly outline its unique selling points and the responsibilities of the people who will have the main roles in the running of the business.
Describe where the franchise will be located, its coverage and any particular challenges or benefits of working in this area. What’s the likely size of your market, who are your competitors and what competitive strengths can you offer that will enable you to succeed? On a wider scale, what are the current trends in the home care market (you can find a lot of positive information online relating to this)? There’s an opportunity here to include some powerful facts and figures that will strengthen your case in the eyes of a lender.
In both your own interests and those of potential lenders, you need to demonstrate that you have a clear marketing plan for your business. The national aspects of marketing will be carried out by your franchisor, but you’ll be responsible for any local initiatives. You need to show that you know who your target market is and that you have an effective strategy of reaching out to them and raising awareness of your services.
For instance, this might involve adverts in the press or local broadcasting media, promotional events and campaigns, and press releases. And don’t forget digital marketing. Social media is a great platform for spreading your message. So is your attendance at and sponsorship of local community events.
Do you have the facilities to do all of this yourself, or will you use a local PR agency? How will you measure the results? Will you set targets for the number of new clients etc? Don’t forget to include the support available from your franchisor, as detailed in Item 11 of the FDD.
Although you might have given an overview of how your business will be run (including your short and long-term aims), this section allows you to go into more detail of your day-to-day operations. For example, you can specify the staffing levels you’ll need; the supplies you’ll have to buy (with help from the bulk purchasing capabilities of your franchisor); other tools and resources; and the general operational structure of your business.
You could also include an overview of the policies and procedures you’ll be using, how you’ll comply with the relevant legislation, and how you’ll ensure a high quality of care for your clients. Some of this will be provided by your franchisor, as they should already have established effective policies and procedures.
Here you can expand on the managerial responsibilities mentioned briefly in your business description. This could include how you will recruit the right people and the qualifications and experience needed for the different roles. You might want to outline your pricing strategies for your services. You can also go into more detail about your own background and the particular skillset that will make you a good franchise owner. Will you be responsible for overseeing the running of the business or will you appoint someone else to carry out this role? You should be able to find more details of managerial responsibilities in Item 15 of the FDD.
Show that you have a clear understanding of the financial commitment involved in owning a franchise. How much money will you need for the initial funding of your business and what sources of funding are you seeking? Again, your franchisor will be able to help with many of these details. However, you’ll also need to show that you have a good idea of how your business will perform, both in the immediate and more distant future. Have a talk with other franchisees in the network (particularly those operating in similar areas) to get an idea of the potential revenues.
Include a profit and loss forecast, along with projected figures for each of the first three years and cash flow projections – but be careful to use realistic figures. Some graphs and charts might help you to give a more powerful visual representation. How soon do you expect to make a profit? Will there be strong seasonal variations in demand for your services? Talk to your franchisor – you’ll also find some useful financial information in items 5 and 19 of the FDD.
In this section, you can also demonstrate that you’re aware of the financial and other risks involved in launching a new franchise. Show that you have a contingency plan and effective strategies that will enable you to deal with any challenges that arise.
A business plan should be reviewed and updated regularly. One couple that have taken this heart is Judy and Will Clay, who moved to Cumbria to start their own franchise and have since continued to develop and grow the business.
The appendix enables you to provide extra information that could strengthen your business plan and help you to gain success with prospective lenders. For instance, this could include tax returns; legal agreements; market research data; and more details of your senior managers. Why not include some graphs or histograms of relevant data as well?
So, whatever your plans for a new franchise, remember that a strong business plan should form the foundation of your success. Never forget that a carefully researched and written plan could not only help you to secure vital loans – it will also give you a powerful framework for the future of your franchise.
Your journey begins by speaking to our Franchise Development Manager Luke Spellman. Book a call with him here.