Business Planning Tool

for Social Business propositions in the UK

by

Co-operative Assistance Network Limited

Navigation / Guidance / Templates
Context / jump
How to use this interactive tool / jump
Business Planning / Checklist / jump / jump
Synopsis / jump / jump
The Mission / jump / jump
Products and Services / jump / jump
Social Impact / jump / jump
The Market / jump / jump
Marketing Plan / jump / jump
Production and Process / jump / jump
Premises and Equipment / jump / jump
People / jump / jump
Organisational Structure / jump / jump
Financial Projections / jump / jump
Risk Analysis / jump / jump
Summary / jump / jump

Version 3:January 2016

Copyright notice: you may copy and transmit this document only if this copyright notice is retained and Co-operative Assistance Network Limited is attributed as the author.

Co-operative Assistance Network Limited

Context

'Social businesses' include social enterprises, co-operatives, community businesses, mutuals and employee owned businesses.

You should not begin work on a business plan unless and until a feasibility assessment has confirmed that the idea is viable. If feasibility has not been established, there is no point in writing a business plan – your energies would be better spent on establishing feasibility.

To be clear: a feasibility study tells you what can and cannot be done and a business pan tells you how to do it.

It is not a duplication of effort to do both because much of the content of the business plan will come from the feasibility study.

Once the business plan is ready, you can begin acquiring the resources you will need to start up the enterprise, including the legal vehicle. The most appropriate legal form will be identified in the business plan. That is the theory, but in practice it may be necessary to acquire some resources before the business plan is ready for publication. If that is the case, be careful, but in any case do not begin to acquire resources before feasibility is established. There are many ways in which that could turn out to be an expensive mistake.

The feasibility of your social business proposition can be demonstrated by a convincing Feasibility Study or Feasibility Assessment. You can download an interactive tool like this one to help you write a feasibility assessment here.

A business plan has two parts and is incomplete without both:

  1. The narrative part. This is a tool to help you write the narrative part of a business plan for a feasible new social business in the UK.
  2. Financial projections. You can download a spreadsheet-based financial projections template here.

A comprehensive guide to the process of starting a co-operative or community enterprise can be found here.

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How to use this interactive tool

The term “business plan” is used here to mean just the narrative part of the business plan, so remember that you will also need financial projections.

The Guidance section consists entirely of information that will help you compile your business plan. The Templates section is a set of templates which, when filled in, will make up your business plan. This can then be detached from the Guidance section and published.

The basic idea is that you enter text in the boxes in the Templates section. The existing text is not protected from editing, however, so you can customise each template, for example to add space for free commentary, but be sure not to delete anything important!

You may need to insert extra rows in some of the tables in the templates.

Internal hyperlinks look like this: jump.

Save your work frequently. Save it as a new version (include the version number in the filename) before you make any major edits so that you can go back to the previous version if anything goes wrong. Also, save it as a new version every time you copy it to other people.

It is important to think of this as a work in progress. A business plan in development is dynamic and responsive.

You can use this tool to identify areas where you need to find external help and to specify exactly what support you require.

If you need to share your business plan before it is complete, you could temporarily replace the missing part(s) with an explanatory statement.

When you have finished, you can print off all the completed templates and bind or staple them together or you may be able to convert those pagesto a .pdf document – your Business Plan.

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Business Planning

1. What is a business plan?

At the risk of sounding obvious, it is the plan of how an enterprise is to be established and developed. It describes how it will work and explains why it will work.

The business plan is a written, detailed description of what your enterprise is: who is in it, what it does, why it exists, how it will run, how it generates an income, who buys its product or service, why it is a social business, etc. Anyone reading it should be able to answer any question they may have in relation to your business.

There is no right or wrong format: some people prefer to structure or order the information differently. These templates are laid out to help you cover the key areas and you may wish to edit them or their order of presentation, but be careful not to omit anything important.

2. What is in a business plan?

That which will make it a meaningful document. Business plans should be constructed to describe an actual business rather than businesses developed to suit business plan templates, though sometimes it is necessary to translate your business plan into the format of some outside agency such as a bank.

3.Why have a business plan?

It is often assumed that the business plan writing is a tiresome necessity entered into only to convince someone to put up a loan or an overdraft. Though this may be a part of the story it should come a long way down the list.

The list:

3.1. To provide a structure within which to establish what needs to be looked into.

  • To provide the questions which drives that research.

3.2. To establish in your own mind(s) whether the investment of your own time and energy is appropriate.

  • What do you think about it? It’s your life we are talking about here
  • Construct the business plan
  • Read the business plan
  • Do you believe it?

3.3. To be a blueprint to follow in the setting up process. Very few businesses can possibly be into full production and sales immediately. The more that can be worked out up front, the faster things come up to speed. Many, many businesses fail before they truly get going, often having done enough to prove that it would have done well if it had got up to speed faster.

3.4. To be a benchmark. A business plan should not be written and then thrown into the back of a filing cabinet. It is the yardstick by which actual performance can be measured. Are sales up to projection? Are the costs on target? What is going right and what is going wrong?

3.5. To establish common purpose. To make sure that everybody involved in the enterprise knows what it is all about and what they are committing themselves to. Those who are going to take the responsibility for it, workers, associates, key suppliers, marketing people, possibly key customers, family, friends, auditor, accountant, solicitor, landlord and the people who put up the money.

4. How do I go about it?

4.1. Knock up a first version immediately. Getting past the blank piece of paper is the most difficult part of the whole process and the sooner it is done the better. It really does not matter how poor draft 1 is. It is not where you start it is where you finish.

4.2. Don't get fixated on using a template. There are pros and cons to using a template. Pros include:

  • Helps to ensure that nothing is left out
  • Can help the process of gathering data
  • Preformatted
  • You get guidance tips.

Cons:

  • Time spent searching for the ideal template may be better spend business planning (stop lurking around here and get on with it!)
  • Doesn't help you construct the plan as a story
  • Can end up unbalanced with some massive sections and some tiny
  • Does not encourage you to present information in different ways
  • Can be poorly formatted. Could be tricky to convert it to a house style. It's usually obvious that a template has been used.

If you decide not to use a template, use a good word processor and all your editing skills to organise the information. Have it formatted consistently, spellchecked etc. and made presentable. Published versions should be formatted for printing.

4.3. Get advice from everybody. You do not have to take it, but every question raised in seriousness is either something you can answer or something you will have to get an answer to.

4.4. Every time you find something worth putting in the business plan do so.

4.5. Ask the business plan questions. What ever it cannot answer is something you need to know and put in it.

5. How much detail?

The actual plan should say only what it has to say. Seventy page business plans look impressive but nobody actually reads them so they are of no use at all. Say what you know and why you know it. For each part of the business plan have a resource folder which contains the back up information on how you know it, e.g. the detail of desk research, market research, quotes, work flow diagrams, etc. You can refer to these at will.

6. Where to start?

Try a mission statement. What is it all about? What is this enterprise setting out to achieve? The business plan describes how. The mission statement says what. It is much easier to plan how to do something if you know what that something is. This is especially true of enterprises where a group of people come together to achieve something. Agreeing a common statement of what that is will save many tears before bed-time.

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Synopsis

(some would say Executive Summary)

The primary purpose of this first section is to help the reader decide whether or not this document is relevant to them. If it is, they will read on.

It is an introduction to the business and a summary of the plan. It gives the reader key information, such as:

  • Nature of the business
  • Location
  • Scale
  • Summary of the story so far (including reference to feasibility assessment)
  • Social impact
  • Ambition

What other information may be considered to be “key” will be contingent upon the particular enterprise and the story that you want to tell but may include:

  • Legal form
  • Status (co-operative, charity etc.)
  • Key people
  • USP
  • Challenges ahead
  • Management structure

template

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The Mission

The objective of this section is to help you write a succinct mission statement that describes your social business's purpose.

All social businesses begin with a vision – an idea of how the world could be a better place if a project could be established based on a set of values and with particular aims. At first, the vision may be poorly defined. A good place to start is to describe those values and aims the best you can – that will help to focus and clarify the vision.

The vision alone is insubstantial. To bring the project into reality is a creative act. It is the crystallisation of the vision around a seed. That seed is the mission statement. Formulating a mission statement will enable you to clearly share the vision with others so that a coherent enterprise can be constructed.

If you find it difficult to write a short mission statement, it may be that you have many apparently disparate aims. What is the common thread or unifying principle? You may be able to express the mission in terms of the intended social impact, or, for a co-operative, the member benefits.

Here are two examples that may help:

  • Oxfam: To create lasting solutions to poverty, hunger and social injustice
  • Creative Commons develops, supports and stewards legal and technical infrastructure that maximises digital creativity, sharing and innovation.

Note that a mission statement is not the same thing as a marketing slogan or strapline.

Write your mission statement with longevity in mind. It will guide the development of the enterprise beyond the foreseeable future, so draft it very carefully – consider every word – and make sure it is agreed by the whole team and not a simple majority.

Once you have agreed a mission statement, pin it to the wall. It is important that everybody involved knows the mission statement – this will help to keep activity focused on the mission, resolve conflict and misunderstanding and guide strategic planning.

Check any proposed new activity against the mission statement. If it is considered to be off-mission, you should have an overwhelmingly good reason – and consensus – before going ahead.

template

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Products and Services

What are your commercial products and services? Why are they so wonderful? How much can be delivered when operating at full capacity?

template

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Social Impact

The community in which the social business operates

Describe or define that community.

Describe how the need being addressed impacts this community. Does it affect individuals, families, schools, the local economy etc.?

Estimate the size of the community in terms of population, geographical area etc. Within that community, what is the scale of the problem?

If you draw on research to do this, cite your sources.

The social output that the social business will deliver to that community and the positive impact that that will have

What exactly are the outputs that will have the positive social impact that you intend? In order to substantiate your claim that your business is a social business you will need to provide evidence that it has achieved its social objectives. Therefore you will need to:

  • Set targets for social outputs
  • Measure and record activity against these targets
  • Report the results (and possibly have those reports audited)

How will you do these things?

Some social outputs are easy to measure, such as qualifications delivered or number of meals-on-wheels delivered. These are called hard outputs. If you are dealing in soft outputs, such as increased self-confidence or work-readiness in individual clients, you will need to consider how you will measure and record them. For a social business, these systems are part of the business model.

In the world of social business, the following terms have particular meanings, which you will need to understand not least so that you can deal with other agencies without ambiguity:

  • Social output: This is your social product, as described above.
  • Social outcome: This is the effect that your social output has on the community. For example, the number of meals-on-wheels clients getting adequate nutrition over a given period.
  • Social impact: This is the difference that your social output makes. For example, if you did not deliver meals-on-wheels it may be that some clients would be catered for by carers, so it would seem that your service does not have such a great impact after all. However, it now becomes clear that what you are really providing is respite to carers – that may be your main social impact in this scenario.

Note that positive environmental impact (or reduced environmental damage) does not count as a social outcome. Your business will need additional systems if you want to monitor your environmental impact. Use the same approach: set targets, measure progress, record, report and (optionally) audit.

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The Market

The market is the group of consumers that may be interested to receive your commercial products, services and social output. It may consist of a number of smaller groups, or segments, that you need to address separately.

The success of your Social Business depends upon the ability of the market to support it, so it is vital that you understand your market.

It is important for a social business to distinguish between customers and clients:

  • Customers, or purchasers, are those who pay for goods and services;
  • Clients, or beneficiaries, are those to whom goods, services – and social product – are delivered.

Therefore your social business will have one or more of the following markets:

  • Customers who are also clients and purchase services for themselves. They may use their own money or funds provided to them by other organisations to buy from you;
  • Funders who give you money to recruit and serve beneficiaries;
  • Customers who pay you to deliver services to their own clients;
  • Commercial customers paying full rate, possibly in part persuaded by the fact that some of the profit made will be applied to pro bono work for beneficiaries that you select.

Describe all of the markets you intend to operate in and how you intend to engage with those markets.