Hints on writing a Successful Franchise Business Plan
The most well known franchise lenders have all declared, in recent British Franchise Association meetings that finance is available to loan to franchise business.
This is fantastic news for the UK franchise sector. The banks are enthusiastic about franchise start-ups as statistically, in excess of 90% of franchise owners in the UK operate profitable businesses confirms the annual national survey carried out by the British Franchise Association.
Additionally, the banks are making much use of the Enterprise Finance Guarantee Scheme. The Enterprise Finance Guarantee scheme has been designed to provide government underwriting of funding for the development of small businesses up to ?1,000,000.
If you are requiring finance to fund a franchise opportunity you should prepare a well thought out and documented plan for the development of your franchise business. Every franchise business plan submitted to the banks for provision of finance needs to outline at least the following:
1. Careful research of the franchise that you have chosen
2. Clear understanding and concordance with the franchise contract
3. In-depth local market analysis by the prospective or existing local franchise operator
4. Local competitor research and how that may affect profit and sales forecasts
5. Statement of the capital you currently have available
6. Detail of any assets which can be used as loan security
7. A clean credit history
8. A commitment to follow the system proven by the franchisor
9. Support of your family members in you starting up your franchise business
10. The bank recognises your chosen franchise system as efficient and effective from its own independent research
Against the above items the bank will come to a decision on the borrowings it will provide to the new business.
To assist with your business planning, take time to look at the online business sections of potential lenders as many provide free business planning software to assist in building your business development plan correctly, helping you draw together the essential information that the lender requires to understand your plan and therefore decide if they can lend you what you require.
Nick Strong is MD of SelectYourFranchise.com and a leading Franchise Consultant to the UK franchise market.
For further information on franchising visit our Business Franchises section.
