Why a Business Plan is Essential and How to Build One

Do I need a business plan? Well, of course you do, but a better question is what kind of business plan do you need? If you're going to run a business, you have to have a plan to be able to follow and track. Before you even buy the business, you want to make sure that business plan is going to be able to help you achieve your financial lifestyle goals.?

Building a Plan- Financial Spreadsheet

There are two components of a business plan. The first is the financial spreadsheet. Lots of people make themselves rich on paper, thinking, “I'm going to make all this money in the business”. You will want to have a financial spreadsheet that you build through discussions with the franchisor. The franchisor can provide you with information from their item 19 in the disclosure document, and their earnings claim, or you can utilize the interviews with existing franchisees. In the end, your total financial spreadsheet should be for two years, month by month, with details on how you're going to grow that business for the next two years.?

Building a Plan- Story Business Plan

The next part is more important, which is what I call the story business plan. Whatever numbers you create, you have to be able to tell the story of how you're going to create it. You've got to tell yourself, and you've got to share that with the bank, in writing. The bank is going to send it up to the risk department, and those people are never going to see you. They have to assess it. So your story plan should answer some key questions: Why this franchisor? Why this industry? Why are you in that business? What are the trends and what do they support? I actually have a Banker's Business Plan template that I work with my clients on so that they can support their business plan.?

When you combine those two elements, you're going to have a very good clarity on how well you're going to do in the business, and you can only build those business plans after doing a significant amount of research. I welcome the opportunity to help you on this journey. Click on the QR code, and we'll have a conversation to get started.