Karen Brown, franchise consultant and business owner, looks at the reasons why franchise business owners avoid developing a business plan and the risks that creates.
Business planning is a critical part of laying the foundation for any successful company, especially SMEs.
However, many franchise business owners either don’t plan or delay the process of creating a plan for a variety of reasons. While, on the face of it, the reasons may seem valid, failing to develop a business plan often leads to poor decision-making, wasted time and effort, missed opportunities and a huge potential for business failure.
You wouldn’t get on a flight if the pilot didn’t have a plan; most of us don’t even get in a car these days without putting the SatNav on to plan our route, even if we have driven it many times before.
So why would you risk your future and that of your family and employees by trying to run a business without a plan? “I wouldn’t” I hear you say, but statistics show that only one in four (23%) of SME owners have a plan that is written down and shared with their team.
Here are the most common reasons franchise business owners give for avoiding developing a business plan, and why these excuses could be holding them back:
“I’m too busy”
Many franchisees are so caught up in the day-to-day demands of running their operations that they cannot afford to take time out. They feel that dedicating time to writing a business plan is a luxury they can’t afford. However, without a plan, they’re often stuck reacting to problems rather than proactively growing the business. A business plan can help clarify priorities, improve effectiveness and create a roadmap / SatNav for more efficient operations.
“I already know what I’m doing”
Some franchisees believe that their deep industry knowledge and experience makes a business plan unnecessary and take the view “It has worked up until now”. They feel they already know the direction they want their business to go in. However, a well-thought-out business plan forces owners to challenge assumptions, understand market conditions, and set measurable goals. Even established franchisees benefit from a structured outline for future growth.
“Business Plans are only for start-ups and investment”
A common misconception is that business plans are only required when trying to secure funding or securing a franchise licence. While they are indeed essential in those situations, business plans are of benefit at any stage of a franchise’s growth. They provide ongoing guidance for the owner and the team and help modify strategies to changing market conditions. Without one, franchises often drift aimlessly, miss changes in market dynamics and disengage the team.
“I don’t know what should be in a plan”
Many franchisees think that business plans should be complex, requiring extensive research, clear data, and robust financial projections. Whilst I am a strong advocate of having robust financial forecasts a business plan, once you have secured your licence and your funding, your business plan can be as simple or detailed as you need it to be. The important bit is it serves as a functional, dynamic document to guide decision-making for the whole team, and is not just an academic exercise which outlines what you think the bank, or your franchisor, wants to hear.
“I can’t predict the future, so why bother?”
If I had asked my clients 10-years ago to come up with a business plan which allowed for Brexit, a global pandemic and war in the Ukraine, they would have looked at me as if I has two heads. The uncertain nature of business and the wider economy often leads people to dismiss planning as pointless. However, while you can’t predict every detail, having a business plan provides a flexible structure to adjust when challenges or opportunities arise. It’s about having a strategy that guides you and allows changes to be made as you go along not trying to predict the future with 100% accuracy and having a plan which needs to be rigidly followed at all cost.
“My team don’t need to see a plan, they do as they are told”
Hmmm – what do I say? When people leave roles and cite pay as the issue, it is hardly ever about pay. Pay is often just the excuse used when people have lost faith in the business they work for, are struggling to see where it is heading and, more importantly, where they fit into the business going forward.
A great business plan articulates the vision, values and purpose for the team to be guided by. It details the long-term and medium-term strategies and short-term key actions and breaks the strategies down into the five functional areas of the business; the team, customers, finance, marketing and operations; with clear targets for each area.
This means that every member of the team knows where the business is going and what they need to do, when, why and how they are measured: ultimate alignment and accountability with everyone pulling on the same rope and in the same direction.
Not investing the time to develop a business plan may seem like a time-saver but, in the long run, there is a danger it will lead to confusion, missed opportunities, inefficiency and possibly even business failure.
Addressing the common excuses head-on and dedicating time to crafting a business plan will give you and your team clarity, focus and alignment, resulting in improved engagement, retention and results.
In the words of Winston Churchill “He who fails to plan is planning to fail” so, if you don’t have a plan and one or more of the above excuses resonate with you, perhaps it is time to get started.
