Understanding Social Enterprise: Theory and PracticeSage Publications

Case 5.5

Income Streams (Multi-Stakeholder Co-operative)

Read in association with Case 5.3, Case 5.4 and Exercise 5.2

Income Streams
(Multi-Stakeholder Cooperative)

Extracts From:

Business Plan

The information on the following pages comes from the pre-startup business plan of a company based in the North of England. It provides information on the product idea and marketing strategy, and the sources of finance that were used to reach a point where the organisation can start trading.

Change History

Version / Date / Status
V1.0 / 14 January 2001 / Draft
V1.1 / 19 January 2001 / Second Draft
V1.2 / 31 January 2001 / Third Draft
V1.3 / 12 February 2001 / February Final
V1.4 / 28 March 2001 / Revisions
V1.5 / 04 April 2001 / April Final
V1.6 / 03 October 2001 / October Revisions
V2.0 / 30 November 2001 / November Re-write
V2.1 / 07 December 2001 / November Final

Executive Summary

[Case 5.5] requires a mixed investment package of £340,000 over threeyears to fund its start-up and development phase.

The investment will be phased as follows:

Month 1:£95,000 – initial infrastructure, R&D, start-up and marketing costs

Month 3:£25,000 – working capital

Month 6:£220,000 –working capital for the establishment of a sales force and expansion of the product development team

The following capital has already been obtained from the sources listed below:
DTI Smart Award: £44,000 (Grant)

Founding Members: £21,000 (Equity)

National Westminster Bank: £25,000 (Loan)

We are now offering shares at 20p each to obtain the balance of the investment package.

Additional amounts may be sought as promotion and advertising plans are finalised. We expect grants to be available from the Investor for Growth scheme to assist with future marketing costs.

Product Idea (Business Plan – Section 1)

The business plan contains a diagram of the main product idea: a database product that can be deployed either on a network of PCs or an Internet server to capture an organisation’s contacts and products in such a way that they can be published in directories, and used in the course of developing a computer-based trading system.

The business plan included a diagram suggesting that the product would be installed on a private network, then optionally made available through a public network to other private computers.

Target Markets (Business Plan - Section 2)

The business plan outlined the plans of the company to develop a direct sales force.

Governance and Management (Business Plan – Sections 4 and 5)

The business plan contains a commitment to employee ownership (with a maximum of five directors, of which three would be elected from the workforce). The company sets out a decentralised expansion plan involving a network of employee-owned businesses based on replication of the structure below.

Early Management/Governance Structure

Long-Term Structure Plan

Mike Bull and Rory Ridley-Duff, 2015 Creative Commons 4.0