The business plan

June 23, 2014

There's no point running, you have to start on time

What are a franchise entrepreneur's best allies? The most important is the business plan. As its name suggests, it's the project's action plan, outlining its development from idea to profitability model. It's a roadmap for organizing the project, testing the realism of hypotheses, simulating several scenarios and verifying feasibility, especially when looking for financing.

A business plan means having a 3 or 5-year vision of your company's financial situation - a perilous exercise indeed! As with building a house, there's no room for improvisation, but rather for solid foundations:

It's impossible to draw up a business plan without a sound knowledge of the market. There are many sources of information: reading the press, market watch, acquiring market research... not forgetting discussions with competitors.
The need for an exhaustive vision of the investments required at the outset: important elements for starting up a business and ensuring its profitability.
A precise calculation of the total costs required to reach the sales target
Precise preparation of budget, sales and cash flow forecasts

A month-by-month cash flow plan, the sinews of war

The first stage of the rocket: the need to invest before business starts. Sales build up only gradually, while costs are present from the outset.

Secondly, when customer demand increases, the company's cash flow needs are violently affected (additional purchases, recruitment, etc.); needs that will only be covered later by customer payments.

In addition, a cash-flow rescue plan must be drawn up in case of unforeseen circumstances.

Franchises are not so helpless when it comes to business planning

It's no secret that writing a business plan that includes a cash flow forecast is easier said than done, even for those with a solid grasp of management. AGT Retail, the business intelligence solution dedicated to franchising, includes a "Business plan" module. Configurable according to business and investment type, the solution takes account of different outlet formats, and can simulate forecasts over 3 to 5 years for openings, expansions or transfers.

The tool's strength: benchmarking! In fact, it is possible to produce a forecast file for the banks, showing network comparisons. But above all, benchmarking with other outlets in the network or with competitors gives the entrepreneur a firm grounding in reality, so that some people don't get carried away!

What's more, once the outlet is open, it is possible to track actual sales against forecasts, which facilitates production, reliability and follow-up of opening files.

Moral... the entrepreneur who arms himself with a solid business plan is well advised.