Page 140 - Business Plans that Work A Guide for Small Business

The Critical Risks and Offering Plan Sections • 131

Lazybones Critical Risk Section

SECTION 8: CRITICAL RISKS

• We assume that the Lazybones business model can be Replication risk
applied with minimal changes to a large number of
campuses across the country. Response is bolstered
by the fact that the
While this is based on years of experience at the business model has been
University of Wisconsin, Syracuse University, Boston successfully replicated
University, and the University of Colorado, the assumption before. They also talk about
a monitoring strategy to
make sure that the new
may still prove flawed at some schools. We will carefully stores are on track. Metrics
monitor customer acquisition rates on each new campus to measure progress are
and franchise only after opening four more company stores. an important aspect of
planning.
• We believe we offer franchisees a sufficiently attractive Imitation risk. Will
value proposition that they will remain franchisees even potential franchisees forgo
Lazybones and try to start
after they have learned all the details of how to their own laundry service?
successfully run a Lazybones.
However, there is a risk that some of them will try to Addresses this risk
operate independently and compete with us once their with a combination of legal
remedies and providing
franchise contracts are up. We address this risk by having critical services through
headquarters. Lazybones
franchisees sign noncompete agreements, insisting any might consider enlisting a
university agreements be signed with Lazybones prestigious law firm that
specializes in franchise
headquarters rather than the franchisee, and keeping many documents in their team
critical functions centrally controlled. section.
• Our financial plan assumes that all company stores and Customer acceptance
franchisees can grow at roughly the speed the Syracuse risk
and Wisconsin Lazybones grew.

Not achieving this growth would mean that new stores Since Lazybones op-
would operate longer at a loss, reducing the company’s erations are fixed locations,
it has plans to use more
margins. We address this by placing strong, highly motivated aggressive customer acqui-
managers in charge of each location and giving them both sition strategies to remedy
the authority to identify ways to grow and the experienced any problems.
support of executive management.
Franchisee quality risk
• We assume that the company can thrive and grow without
a high-level executive possessing franchising experience. The experienced
panel will help those new
This is based on the success stories of other franchises franchisees that need some
mentoring. While advisory
whose executives were highly competent businesspeople councils are a good start,
but new to franchising. We will address this risk by creating Lazybones also needs to
mitigate execution risk
at the store level. They
an executive advisory council with experienced franchisers will need a field support
as members and enlisting experienced franchising program to help franchisees
consultants for additional support. in trouble. This is a gap in
the current plan.