Franchise Advice “M
y plan is the same as the plans of other franchisees in the business.” That’s a comment
I often hear from potential business owners looking to take on a franchise. Quite often, these keen individuals have lost sight of the importance of the process. A business plan is a route map to success. Of course, that’s not to say that there won’t be bumps along the way, but setting out without this basic route map means there is no direction and the business will ultimately lose its way. It is an analysis of skills and experience, a summary of the market that you’re entering into and a guide to help you navigate all that’s ahead. A sound, relevant and bespoke business strategy will also help you to secure the funding you need to get started. Finance providers, such as Lloyds Bank, will already have a knowledge and understanding of the franchise that you are investing in. What they’re most interested in is the proposal for your individual franchise. With all that said, however, preparing your business plan is no easy task. Do use the support and resources available to you
to give you the best chances of success. Your franchisor and your bank’s franchise department may be able to provide templates that will give you the structure you need to begin making the proposal your own.
Once you’re happy with your plan, learn it inside out. Be prepared, so that when you meet with a fi nance provider you’re able to answer any questions asked and demonstrate that you have considered every eventuality. Research your fi nance provider, too.
Typically, banks will provide fi nancial support for up to 70 per cent of your total investment costs, but this will vary between providers and franchises. The franchise unit at your chosen bank may even be able to advise you of the information they might need based on your particular brand or sector before you complete your business plan. This way, you can build in any necessary information they might be looking for and prepare in line with the likely levels of funding. Remember, banks will require security for any lending requests beyond a certain level and you’ll need to factor that in to your borrowing needs. Where such securities are not available, the Enterprise
Finance Guarantee – a scheme in which the government provides a guarantee for 75 per cent of borrowed funds in return for a two per cent premium – is an option worth consideration. Schemes such as this are a fantastic means of support for those who have suffi cient skills and experience to run a business but need that extra backing. Here at Lloyds Bank we have a range of funding options available, including the government-led Funding for Lending scheme, which is set to run until January 2018, providing more support to businesses in the UK economy via the Bank of England.
Launching a new franchise can be a daunting prospect for anyone, but hard work and determination – all evidenced in your business plan – will take you a long way. Use your plan as your route to success and invite key parties, such as funding providers, to support you along the way.
About the author
Richard Holden is the head of franchising at Lloyds Bank
July/August 2017 |
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