Business plans for SEs and SPBs

Writing a business plan helps to ensure you focus on the core of your business. You must concentrate on key deliverables in a resource-constrained organization and communicate effectively with your stakeholders, including your funders or investors, customers, community, board, employees and volunteers. Business planning is valuable for any social enterprise (SE) or social purpose business (SPB) and integral to:

• Attracting investment
• Identifying risks
• Measuring social or environmental outcomes
• Demonstrating that you are using a business approach
• Showcasing the management team
• Building alliances
• Checking thinking
• Determining feasibility

In a business plan, you must clearly articulate the mission of your program, outline specific actions to achieve your program’s goals and objectives, establish targets for planning, measuring and improving performance, and project the necessary resources, costs and revenues of your program.

Many business plan templates exist in the public domain, including this one. The elements are best used as prompts by social entrepreneurs to build their own plan, assessing along the way whether or not the question (or element) is relevant for the Social Enterprise or the Social Purpose Business.

Some of the differences from a traditional for-profit business plan include:

1– Description of the business/mission statement

The social mission and the importance of meeting both the financial and social goals should be discussed in this section.

2– Management and organization

Financing the capacity of the organization is as important as supporting the programs. Include an assessment of the current organization, planned additions and/or changes as well as the cost of building the team’s capacity in order to achieve the projected growth. Demonstrate that the staff has both programmatic and business skills.

3– Market assessment and marketing plan

The plan should focus on delivering market-driven products or services as opposed to program-driven products or services to the target customer. You will also need to articulate how to promote your social objectives along with the product and service. Partnerships and collaborations extend the reach of the social venture. Highlight your partnership strategy in this section.

Your marketing plan includes the strategies and tactics to reach your customers, partners and the community. Outline the public relations, media relations, and advertising that will be required to meet your objectives. The marketing plan should be linked in with your financial plan and your overall strategy.

4– Financial

A solid financial position will allow you to pursue your mission with flexibility and high-quality service, beyond mere stability. Investors must feel confident their investment will be used effectively to achieve both the social mission and financial results that will enable your organization to thrive and achieve continued growth. The financial plan provides the framework for social entrepreneurs to forecast the resources they need to create and sustain social and economic value. Commercial entrepreneurs prepare business plans to show why they need money and how they will use it. Social entrepreneurs should use the same approach and not worry about the limited resources currently available. Investors and funders alike want to know the cost to develop, start up, offer and deliver services or products, whether or not any one user or payer is willing to cover it. When interacting with potential funders or investors, you need a detailed budget and projection of required outside investment tied in with a plan to reach the desired market position. Investors want returns, typically a blend of financial and social. Your plan must describe the potential “return” on investment for investors and the desired social outcomes, and provide a framework for assessing social performance.

Remember that a social purpose business is similar to any other for-profit business, but the organization will likely raise financing from investors who are interested in a double bottom line. Social enterprises in the non-profit environment will typically raise funding from traditional fundraising, loans and other forms of social finance.

For further details and support on developing a business plan, download the MaRS workbook, The Business Plan and Executive Summary. The information and exercises in this workbook guide will provide a framework to help you organize and articulate your thoughts.

References

Dees, J.G., Emerson, J.,& Economy, P. (2001). Enterprising Nonprofits: A Toolkit for Social Entrepreneurs. Toronto: John Wiley& Sons.

Tags: business-plans, not-for-profits, social-entrepreneurship, social-innovation