WHY YOU SHOULD KEEP YOUR BUSINESS PLAN DYNAMIC
Roy Shelton shares his advice on preparing the very best business plan for franchising
The franchise model has been around for many, but it has never been growing as quickly as it is right now. It is estimated that the sector now generates £17bn in revenue and that there are about 10 percent more franchise units now than in 2015.
And it’s not just older entrepreneurs entering the market; younger and younger business owners are now seeing a franchise model as an attractive option, too. This makes franchising an exciting time but, equally, it is all the more important that those entering such agreements have a good business plan in place.
Knowing your place as the business owner
Preparing a business plan which is realistic and believable is vital for any business, regardless if it is a franchise or not. Start by remembering one golden rule: running a business is running a business, and you have to quickly figure out why you run the business you do, rather than take a paid employee role.
Any plan you make should also take into account that entering a franchise deal is unlikely to be for the faint-hearted. Strap yourself in for months (if not years) of personal and social sacrifice and missing out on family and other social gatherings due to the long days, sleepless nights, and demanding staff and customers.
It’s for those willing to take financial risks and who are prepared to work harder than ever before whilst potentially being paid less than the job you quit. Above all, it is about operating at 1,000mph with your hair on fire as you pursue your dreams and aspirations.
Running a franchise builds on a successful business model which is proven; however, it still needs planning, hard work, grit, and determination to succeed. Whilst supported by the licensor, the franchise operator needs to be focused, operate within a set of rules, generate a profit, and do so within a very dynamic environment. If you can get it right, the rewards are massive.
The fundamentals of your business plan
So how? A clear vision, direction, and ability to pivot are needed to achieve these rewards – as is a detailed plan. Top-down, bottom-up planning is the key. Make sure everyone has an opportunity to input into a business plan while locking in checks and balances on what is realistic and viable. Always ensure stakeholders have had an opportunity to input the plan as they will then be more likely to embrace and contribute to the plan moving forwards.
A plan should aim to break key questions such as: What do you want the business to be? What do you aspire towards? How do you want to be perceived by the marketplace? What problem are you fixing? And what value do you create for your clients?
Once you’ve answered these, then ask: How are you going to create this value in an efficient and repeatable manner? How will you measure success? And how will you pivot if you need to?
Having clear ownership of agreed actions, timescales to deliver, roles, and responsibilities are vital, too. These need to be made clear across all the strategic operating areas of the business including sales, marketing, admin, finance, customer delivery, IT, and HR.
Getting this right brings clarity of purpose. Once aligned, you are more likely to have a team contributing to delivering on the agreed vision which will help drive the desired performance, culture, and outcomes.
Build-in mechanisms to your plan to measure, measure and then measure again. Look at all outputs each month. Ask whether the incremental planned improvements have been delivered. If not, why not?
Have these improvements been successfully implemented, and if so, was the forecast outcome achieved? If so, how can you do more? If not, why not? Build-in double control loops so if you have to pivot the tasks or the measurement, then your plan is dynamic enough to allow that to happen. Business plans are not tablets of stone and should allow for the company to retain the ability to pivot.
Why keep your plan dynamic
I’ve seen, first-hand, the need for flexibility in business planning. One of our portfolio companies, Connectus Group, is a prime example of this thinking and approach. Within four years of investing in the company generating and implementing a 1,000-day business plan, the company has grown revenues from more than £500,000 to over £10m.
We now have 60 qualified members of staff supporting over 800 clients across six regional offices in the U.K. and Ireland. Focus has been vital to success. Regardless of your vertical sector, geographical sector, or the problem you solve, it will ultimately drive you towards being specialists.
Being focused does not mean you cannot remain dynamic
COVID-19 was an iconic moment and when we entered lockdown, a huge market opened up for another one of our portfolio companies called Gluu, a leading Edtech company that I invested in two years ago. Gluu is 100 percent focused on improving the learning, mental health, and wellbeing of students and teachers.
EdTech expenditure is set to nearly double in the period 2020-2025 with digital share increasing to 5.2 percent. Only 3.6 percent of the nearly $6tr education market is digital spend, suggesting there is a market ripe for disruption. Here is a great example of a tech company pivoting into online learning and tutoring due to lockdowns which will now continue in that space.
Another key point to remember in any plan is prioritisation. Logical and sequential thinking is crucial to the success of any company. If you don’t market yourself in the right way, then you don’t get leads and capture customers.
If you don’t have the back-end functions and operations, then you cannot deliver the project and support the customer. If you don’t deliver the project and support the customer, then you don’t collect the cash.
Appreciate and understand the complexity of your value chain, and aim to understand who does what and when. Prioritise your efforts on fixing issues before they occur and make things more efficient by thinking through the logical and sequential process of enquiry to cash with the least resistance.
Don’t underestimate the power of reflection
Finally, I can’t underestimate taking time out to reflect. Another business we have recently invested in, Spartan Survival, has found success by developing courses encouraging entrepreneurs to ditch their devices.
My time on their elite survival course enabled me to really prioritise my time and efforts by focusing on what I needed to survive and in which order. There were four key things on our planning to-do list: getting shelter, creating fire, finding food, and securing water. I share this example as there are some transferable points back to creating a business plan.
When you have a limited amount of physical or fiscal resources within your business, revert back to the basics. Planning and resourcing should be at the heart of everything you do, regardless if it is resource and capacity planning in operations, cash flow management, sales, or a PR marketing strategy.
If you fail to plan, you plan to fail. The plan needs to be carefully prepared and remain dynamic as we live in uncertain times with opportunities and challenges which remain around every corner every day.Other news