Page 125 - Business Plans that Work A Guide for Small Business

116 • Business Plans that Work

They have set up a Opening of Owned Stores
conflict of interest that is
common in franchising but Opening company stores first is a critical element in our
most folks work hard to
avoid it. They are explicitly plan. This will test the business model in eight total locations,
stating the company-owned
stores are more important giving potential franchisees confidence that the model works
than the franchises. In a in a variety of environments. These stores will also provide
business plan, never put
forth that one of your pri- much of the cash flow required for getting into the franchise
mary goals is to personally business. Furthermore, we project that after five years, the
benefit. It isn’t necessary
to say; it is expected and eight company stores will provide sufficient net income to
implied.
satisfy the second of our primary goals.
In other words, even if our franchising plan does not meet its targets, the
company stores alone suffice to meet one of our key development goals.
Opening of Franchises

During year one, we will also be planning our move into
A more detailed
Gantt chart timeline could franchising. This will require hiring franchise consultants and
itemize each of these
activities, who would be lawyers and working with them to create our franchising plan,
responsible for leading Franchise Disclosure Document (FDD), and other documents
them, and when the
activities would start (e.g., required to meet federal and state franchising regulations.
beginning month) and end The franchising plan will include a detailed franchise
(e.g., ending month).
marketing plan and prepared marketing and advertising
materials. Most of this work will be completed halfway through year one, and we
will begin actively advertising for and seeking out franchisees.
Obtaining a good return on this franchising investment will require selling
many franchises. The planned rate of expansion is summarized in Exhibit 6.1.
While this is an aggressive plan, we have identified five other personal services
franchise businesses that grew substantially faster, as shown in Exhibit 6.2.

Excellent. It adds va- Exhibit 6.2 Other Competitors’ Franchise Growth Rates
lidity to your claims when
you can benchmark your
plans against comparable
companies and what they
have achieved.