As part of my series of establishing a sustainable social enterprise, the business plan is the second last pit stop on the journey. Developing and writing a compelling business plan is a laborious task, which requires hours of research and compilation. Why should we tarry at this pit stop?
The business plan is a corner stone of the process when it comes to building a social enterprise. The business plan provides:
- Clarity on why you are doing what you doing, and who you are writing this plan for.
- It will demonstrate to stakeholders that there is potential in your venture and that you have a sustainable and differentiated offering, providing a good investment deal.
Who are you aiming at
Identifying the correcttarget audienceis vital to determine the content and focus of your business plan. Who needs to know about your social enterprise and what do you want to gain from their engagement?
Social enterprises have to focus on four key stakeholders in the beginning:
- Potential business investors - You have to present a strong case for investment to them.
- Potential grant makers - You have to articulate to them how the social benefits will be delivered.
- Executive team - You have to help them to plan for the future.
Managers and supervisors - You have to give them a tool to operate the business to deliver social benefits.
Related: Business Plan Template
What are you saying
The social enterprise business plan must contain the following nine key elements:
1. The Executive Summary*
This is your best opportunity to make a good first impression. Write the summary last. It should contain an outline of the following:
- Problem - What pressing and important problem are you solving or what opportunity are you addressing?
- Solution - How are you solving this problem or tapping this opportunity?
- Business model - Who are your customers and how will you make money?
- Product and technology - What is your product or technology? What is the underlying magic? What makes your business special?
- Marketing and sales strategy - What is your go-to-market strategy?
- External environment and competition - Who do you compete with? What can you do that they cannot? What can they do that you cannot?
- Financial analysis and projections - What are your financial projections for the next three years? What are your key assumptions and metrics to achieve these projections?
- Team - Who is on your team? Why are they special?
- Implementation roadmap - Where are you now? What are the major and immediate milestones?
*Since the executive summary is a standalone document, it should be more attractively designed than the rest of the business plan.
2. Organisation’s background and structure
Legal entity, governance, history the social enterprise in a nutshell.
Key staff, funders, advisors, supporters, partners and the organisational chart.
Related: The 4 types of business plans
4. The market analysis and positioning
Describe the market context and the business’ position in the market. This external focus is setting your business plan apart.
5. Marketing plan and sales strategy
Describe the targeted customers, how they will be reached and how the prospects will be turned into earned income.
This is the how, describing the creation and delivery of your offering.
7. Evaluation and impact assessment
Social ventures have atriple bottom lineimpact. These include financial, social and environmental benefits generated, measured and monitored. Both qualitative and quantitative measurement is important.
Detail major risks and how they would be mitigated. This should include both external and internal risks. Always show possible solutions you have thought through.
Provide historical, current and projected views. This should include start-up needs, on-going profit/loss and break-even. Detail assumptions and comments clearly with capital requirements and sources.
Related: How to write a one page business proposal
Action is key
Taking action is key to your success. This refers to how the business plan can be used to benefit your social enterprise. The business plan is a tool that identifies your goals, clarifies your direction and guides your engagement with all your stakeholders.
It gives you credibility and confidence in articulating your proposal when you approach stakeholders. Knowledge and understanding is powerful when you are trying to win support and mobilise others.
After all this hard work, the key question is - would you fund/support your social enterprise based on the information you have provided?