Tips how to write a franchise business plan
- Nick Strong – Franchise recruitment advisor
The leading franchise banks have all declared in recent British Franchise Association (BFA) meetings, I have attended, that they have money to lend to franchise business.
In addition the banks are making much use of the governments Enterprise Finance Guarantee (EFG) scheme. The EFG is designed to provide government underwriting of small business development funding up to £1,000,000.
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Careful research of the franchise of choice
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Clear understanding and concordance with the franchise contract
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In-depth local market analysis by the prospective or exiting local franchise owner
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Local competitor analysis and how that may affect sales and profit predictions
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Declaration of available investment capital
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Personal assets to use as security against the loan
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A good credit history with no CCJ’s
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A commitment to follow the franchisor’s proven system
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Backing from your family in the commitment of franchise business building
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The bank recognise your chosen franchise as efficient and effective from its own indpendent research.
Against the above items the bank will decide the level of funding it will provide to the business builder.
Visit the following links for free business planning software -
http://www.hsbc.co.uk/1/2/business/info/resources
http://www.rbs.co.uk/business/banking/g2/planning.ashx
Visit – www.SelectYourFranchise.com and www.Franchises.UK.com for information about franchises for sale in the UK.
Franchise business plan inclusions
Banks raise cost of borrowing – franchise business comment
The chancellor is to quiz bank bosses over how much they charge small firms for loans, saying he is “extremely concerned” their rates may be too high.
Alastair Darling said the cost of loans seemed to have risen, despite the UK’s record low base interest rate of 0.5%. He said that “banks had a duty to restore lending levels, saying the government did not rescue the banking sector “out of some charitable act”. He has called a meeting with bank executives in Downing St on Monday.
Some good news is that banks are using the new Enterprise Finance Guarantee scheme to help small and medium size franchise business to start and grow.
Even though bank charges will ideally come down the use of the EFG is good news for everyone thinking about buying and building their own franchise business in the UK.
Under the EFG scheme the government will guarantee 75% of any loans made, with the bank covering the remaining 25%. The guarantees will mean that the government, or taxpayers, will pick up three-quarters of the the tab for any bad loans.
In total, the Enterprise Finance Guarantee Scheme will see the Government provide £1 billion of guarantees to support to £1.3 billion of bank lending.
Enterprise Finance Guarantee Scheme – details
- The Enterprise Finance Guarantee will apply to loans, and can also be used to convert existing overdrafts into loans to enable businesses to free up their current overdraft facilities to meet working capital demands.
- The Enterprise Finance Guarantee is available to businesses with an annual turnover of up to £25m. Firms can apply for loans of up to £1m for a period of up to 10 years.
- The guarantee will be available through the following high street banks; Barclays, Clydesdale/Yorkshire Bank, HBOS, HSBC, Lloyds TSB, RBS/Natwest and Northern Bank. It will become available from other lenders if they wish to apply.
If you are considering buying a franchise or want access to additional capital to build your existing franchise business I would advise you to contact the franchise departments of the above mentioned banks.
Mr Darling also reiterated that VAT will definitely return to 17.5% from the current 15% level at the end of the year. The rate of VAT was reduced to 15% on 1 December 2008 to help boost retail sales.
100th franchise blog post
This is my 100th franchise blog post. It has been great to sit down every other day and comment on what is happening in the UK economy and to pitch my views and insights on behalf of the UK franchise market.
Over the past six months we have seen an extraordinary period in British economic history. The end of 2008 borough shock and dismay with the banking crisis. Uncertainty reigned on every area of business. Would customers still buy goods and services? How would margins to protected? How could franchise brand owners and their franchisees raise business development capital from a broken financial sector? These and many other questions dominated franchise industry thinking at the transition of the year.
As we have moved into spring of 2009 confidence seems to be slowly returning. The housing market improved in May with an increase of housing stock value of 1.2% reported by the Nationwide Building Society. Banks have confirmed that they have capital to lend to franchise businesses and are heavily using the EFG – Enterprise Finance Guarantee scheme - to fund franchise start ups and business development capital requirements.
2009 is proving to be a time where much culling of businesses that have run on thin margins during the good times is taking place. On the positive side strong franchise busiensses are becoming stronger by focusing on improving effciancy and productivity in every area of its businesses.
There is now, and in reality never was, any place for complacency in business. Well managed franchise businesses are quickly becoming stronger than ever before. This is great news as businesses that are well managed and profitable in the slow times will fly as the economy improves.
The recently released British Franchise Association and Nat West national franchise survey confirms that UK business format franchising continues to grow in spit of the recession. I am looking forward to commenting further on the twists and turns of the economy during 2009. UK franchising is remaining robust in current times. This is great news for franchisees, their customers and the UK economy. Our community have over £12 Billion to contribute to UK GDP and is a massive employer via franchisee businesses. More to come soon and thanks for visiting and reading my blog. Your comments are very valuable to me.
