The key to ensuring the success of your new bagel business is to create a strong business plan first before doing anything else.
Here are 7 tips for creating your bagel business plan.
1. Parts of the Plan
Business experts recommend the following sections to your business plan:
- An Executive Summary that gives a quick snapshot of your business
- A Company Description in which you give some detail on the purpose of your business
- A Market Analysis that provides industry and market research and as well as pertinent information on your competitors
- In an Organization and Management section is where you should lay out your business and management structure. If you already know who will fill these roles, then include a little bio of each of them and/or a resume which highlights their experience related to the running of a business.
- You also need a Funding Request section where you detail how much money you will need in the next 5 years to establish and run your business.
- Financial Projections is where you should include information on how well you expect your business to in its first few years depending on the available data.
- An optional section that some entrepreneurs include is an Appendix where you can include additional information like resumes and permits.
2. Research your Target Market
While you are putting together your bagel business plan, figure out your target market for a bagel business. You need to also consider your growth potential. Bagels have become a quintessential American breakfast and any of the day snack food so you know there is a built-in customer base.
3. Consider Forming a Legal Entity
For extra protection, you should consider forming a legal entity. Doing this prevents you from being personally liable if your bagel business is ever sued.
4. Be Clear on the Purpose of Your Plan
You might not realize it, but your business plan can have several different purposes that is why it is so important that you are clear on which yours is. For example, if you are trying to attract investors your business plan might look a little different than if you are funding your bagel business all by yourself. In the latter situation, the business plan is more of a roadmap for you to follow.
5. Be As Thorough As Possible
In all your documentation in your business plan, make sure you are as thorough as possible in documenting everything from your expenses and cash flow to industry projections. Don’t forget even the little details, because all of this will help guide you as you get your bagel business up and running.
6. Make Your Plan Adaptable Based on Audience
Because there are different purposes and different audiences that will be viewing your business plan, it is a good idea to create one that is easily adaptable, where you can easily streamline for any particular audience.
7. Always Show Your Passion
While data and research are of course important parts of your business plan, don’t forget to add a giant dollop of passion too. It is important for any investors, customers or employees to see how passionate and dedicated you are to your business. Let them see what you value most and how hard you will work to see your bagel business succeed.
Also, keep in mind that as you grow you might need to revise your business plan to truly expand. Be open to it.
If you decide to join a franchise program instead of going out on your own, there is also important information you need to know that is particular to a franchise agreement.
For the best success you should have a good understanding of not only what franchising, but also key franchise terms that you will hear as you start on your franchising journey. Here are some of the most common terms.
- Franchise: A franchise is an agreement between two legally independent parties which allows a person or group of people (franchisee) to market a product or service using the trademark or trade name of another business (franchisor).
- Business format franchise: With this type of franchise not only does the franchisee use the product, service and trademark, but they must also use the complete business method of the franchisor.
- Product distribution franchise: With this type of franchise, the franchisee only sells the franchisor’s products or services, but doesn’t have to follow a specific method of conducting business.
- Royalty: This is the regular fee the franchisee pays the franchisor for the right to sell their products or services. It is usually based on a percentage of the franchisee’s gross sales.
- Trademark: The brand name and logo of the franchisor.
- FDD: The Franchise Disclosure Document is the disclosure document that details information about the franchisor and the franchise system.
Because franchising is governed by federal and state laws, you need to have a clear understanding of not only the legal requirements for owning a franchise, but also your rights as a franchisee. Franchise experts recommend that your hire an experienced franchise attorney to help you navigate all the legal paperwork. There are two legal documents that you will need to sign: the FDD, which lays out information about the franchisor and the franchise system, and the franchise agreement.
One of the most important documents you will receive as a potential franchisee is a financial disclosure document also known as the FDD. The FDD is a legal document that lays out all the information about the franchisor and the franchise system.
About two weeks before you sign the franchise agreement, you will be given the FDD from the franchisor as mandated by the Federal Trade Commission.
At Shmagel’s Bagels in Ocean City, MD, we are currently looking for new franchisees. We offer a low cost entry program with reasonable fees and we will offer you both support and structure to help you get your new bagel shop off to a great start. For more information about joining our program or about creating a bagel business plan, give us a call or send us a message.