If you're looking to start a business, the thought of developing a business plan might seem daunting. Some even question the value of spending time on a business plan—especially when an accountant can determine what your business requires to be financially viable. The truth is, a business plan can be a straightforward document to prepare, and by going beyond the basic financial information, it can be your blueprint for franchise success.

What is a business plan?

One of the purposes of a business plan is to get your new franchise financed; however, it does much more. Your first step in developing a business plan is to answer basic questions that isolate your true goals. These include: 'Why am I interested in owning my own business?' 'What are my personal objectives?' and 'What motivates me?' You might also ask, 'What level of risk am I prepared to take?' If you can answer these questions objectively, your business plan will erase doubts, fill in gaps, isolate your challenges and reveal your opportunities—both financial and personal.

A business plan is not a document you write once and then shelve. You will have it constantly at-hand, referencing and modifying it during all stages of your franchised business, from startup through growth, all the way to the day you sell.

What does a business plan look like?

A business plan can be one document or several; in digital or in print, written down or presented. Whatever form it takes, it should include everything you must consider when starting a business (including how you plan to succeed).

A good business plan requires a description of the business, information on the franchisor's team and an assessment of management, materials, market and money. It is not enough to explain the business; you must also explain how you can make it work.

While no plan is all-encompassing, yours should include as much relevant information as possible, presented in a clear, concise fashion. Consider using appendices for detailed information, such as your franchisor's marketing materials, product descriptions, financial disclosure documents and comprehensive financial statements.

Who reads your business plan?

Your business plan should answer questions for anyone who reads it. However, it is first and foremost a strategic document—one that clearly states your plans and assumptions and helps you map the course of your business' success, through startup, growth and succession. If you write your plan for someone else, rather than yourself, it will convince no one.

It is the banker who will most closely review your business plan, as it is his or her job to assess your business loan application. Your business plan could also attract potential investors or be a tool to hire managers. Lawyers and accountants are unlikely to read it.¹

Some franchisors want to see a prospective franchisee's business plan, others don't. In any case, your first contact with a franchisor typically takes place before you meet with the bank, and perhaps even before you have fully drafted a business plan.

Initial research for your business plan

The first phase of your business plan is highly personal and may not require much outside research. However, as you move closer to isolating your ideal business venture, you'll need progressively more detailed information about markets, demographics and eventually, a particular franchise system.

Your bank can be a great source of business plan information. A bank that specializes in franchise financing has resources to help you better understand what your business plan needs. Your banker can even provide specific advice regarding the neighbourhood you have selected for your business. Don't hesitate to approach the bank for information and advice early on—even well before you've selected a franchise to buy.

Your franchisor should also welcome requests for information, assuming you've already met its minimum franchisee criteria. Not only can the franchisor offer a basic idea of the kind of financing you will need to get started, it can also provide you with information on current profits, timelines and some of the challenges you're likely to encounter. With this knowledge, you can put together a realistic and reliable picture of your franchise's prospects.

A quick Internet search will reveal many other resources for business plan information.

Various federal, provincial or territorial websites offer free small-business services you can use. The Internet may also direct you to available presentation software, which may have built-in business plan templates you can use to create a more professional presentation.