How to Create a Strong Business Plan to Get a Loan to Open a Franchise
Opening a franchise can give you the opportunity to be your own boss while having the support of a company with a successful product and business model. Starting a franchise can require a significant amount of capital, and many entrepreneurs borrow money to open a business. If you want to take out a loan to open a franchise, you will need to create a business plan to explain to lenders how you plan to make the business successful so you can repay their money in a reasonable period of time.
Why You Need a Business Plan
Lenders use a business plan to evaluate a company’s strengths and potential for success. They want to know how the business will be run, how you will attract customers, how much money you expect to earn, and when you will be able to repay your loan.
A business plan is not just useful to help you obtain a loan. It forces you to think long and hard about how you plan to run your business, what challenges you will face, and how you will overcome them to succeed. A business plan can serve as a guide for your business as you are starting out and in the future.
A Franchise Disclosure Document Can Help You Write Your Business Plan
The franchise you want to invest in should give you a copy of the Franchise Disclosure Document. It should contain information that can help you create a business plan, such as background on the company, information on the target market, advantages of the product offered, marketing campaigns, and costs associated with starting and running a favorable location.
What to Include in Your Business Plan
The first part of the business plan should be an executive summary that provides an overview. This will be the first impression lenders will get of your business proposal, so it should include all of the highlights of the plan and let them know what to expect.
The business plan should include a description of the company. You can get this information from the Franchise Disclosure Document. It should include a description of the franchise, a summary of its history, and a brief description of its product or service.
You should also have a more detailed service or product description. This can be combined with the description of the company. Describe which products you will sell and/or what services you will offer.
The market analysis section of your franchise business plan should include information on the place where you want to open your location and the demographics of the surrounding area. It should explain whether there are any direct competitors operating in the area and whether it is currently underserved. The market analysis should also explain trends and growth projections.
The management structure section of your franchise business plan should explain who will run the day-to-day operations. It should tell the lenders if the business will be a sole proprietorship or a partnership and whether the owners will be involved in day-to-day operations or will be absentee investors. Describe the qualifications and experience of all of the owners.
The marketing plan section of your business plan should explain how you plan to attract customers. This should detail the franchise’s advertising and marketing strategy. It should also describe any marketing and sales courses you will be taking.
The financials section of your business plan should ask for a specific amount of funding. It should also describe your current financial situation in detail. Describe all sources of funding you intend to use to start your franchise. You should also include a financial projection and tell the lenders when you think you will be able to repay the loan.
You can include an appendix if there is any additional information that you think could help your business plan. This can include resumes, tax returns, or newspaper articles.
Between Rounds Franchise Opportunities
Between Rounds is a chain of successful bagel shops with locations all over Connecticut. Our bagels, sandwiches, wraps, and other foods are popular with people who are looking for a convenient bite to eat and who value foods made with fresh ingredients. We offer franchise opportunities that can allow you to be your own boss while working with an established brand. To learn more about franchise opportunities, contact Between Rounds today.
Disclaimer: Between Rounds is not a lender. Before you borrow money to start a franchise, you should consult a financial professional and discuss your personal financial situation and the specific type of franchise you are thinking of opening.