Since systems and supports are already in place for new franchise owners, you may be wondering if you’ll need to create a business plan on top of those.
In this interview, Carmen Chavez de Hesse, franchise expert, shares her insight and explains why business plans are critical for success.
Some of the items Carmen hits on are:
Support you can expect from the franchisor (0:15)
Why a business plan is important (0:30)
Planning your first year of business (1:03)
You might be asking yourself, do I need a business plan if I’m going to buy a franchise?
What Supports Will You Get from the Franchise?
You’re thinking franchise is a business in a box, they’re going to hand you everything that you need. But, in all actuality, they’re giving you the system, their marketing plan, and the tools to run a successful business that they’ve already run as successful.
Why Do You Need a Business Plan?
So, do you need a business plan? Definitely.
You’re still going to be independently owned and operated. You are creating your own, probably, LLC, or even a corporation to hold your franchise business.
Just like any other business you set out for, you have to have a plan and you need to not only have the plan, you have to include your financial forecast and consider what your long-term goals are and even your exit strategy as you jump into becoming an entrepreneur, regardless of if it’s a franchise or not.
Planning Your First Year is Critical
I think it’s also really important that you map out your entire first year so that you have a clear understanding of what it’s going to cost in terms of the initial investment that’s presented in the franchise disclosure document, to the three to six months of additional operating expenses. You’re going to need to cover rent and payroll, and in some instances yourself if you’re going to be an absentee owner and not there on the day to day.
So, you need to have a plan, and you need to have it laid out - especially the first year - so that you have a clear understanding of what your investment is going to be as you get launched.