Step #6: Create a business plan
With the business plan, you should develop cash flow projections for the first three to five years of your business.
The business plan should:
- Describe the services and products that you’re selling, with the demand for the items, and customer base
- Point out the franchisor’s strengths and track record with the franchise system
- Include a financial section that describes your personal financial situation and financial potential of the business.
Lenders will expect to see realistic budgets that demonstrate your ability to manage cash flow. Two key budgeting tools are cash flow projections—which indicate how much cash the franchise will need, when it will be needed, and where it will come from—and profit and loss forecasts, which predict anticipated sales, expenses, and profitability.
An accountant can assist in preparing the appropriate documents for your business plan.