Business Planning for Social Enterprises
As more and more non-profits look to diversify their funding streams, directors and executives are looking at the financial opportunities afforded by social enterprise initiatives. But moving from a grant administration set-up, to one that actively seeks out earned income streams, needs to be carefully planned. Needless to say, traditional business planning has an important role to play in ensuring that sustainable business markets are pursued. Irrespective of the business planning approach used, non-profits should seek to identify and put in place strategies that clearly play to their business strengths.
As an initial first step in the planning process, it can be beneficial for directors and executives to create a “Business Model Canvas” of their proposed social enterprise initiative. The canvas focuses attention on nine core elements, that collectively, impact on the sustainability of an organisation’s business model. Completing the business model canvas in advance of writing a business plan is helpful, as it forces boards and committees to test the assumptions upon which their business model and thinking are based. As a result, a more accurate picture of market opportunities and non-profit competencies and strengths emerge. This in turn enables a business plan to be developed, that selects the specific business strategies that can best help a non-profit to succeed in achieving its social enterprise objectives.
In preparing the business model canvas, boards and executive staff should seek answers to nine key questions:
1. What customer or social problem are your solving?
2. Why will customers buy from you?
3. How will customers access your services or obtain your products?
4. How will you acquire and keep customers?
5. How will you generate cash?
6. What assets do you require?
7. Who are you dependent on to deliver services and produce products?
8. What are the most important activities for the social enterprise to focus on?
9. Where does spend need to be concentrated?
Once directors, trustees and executives have a solid basis to answer each of the nine questions, then they are better equipped to write a business plan that can be successfully executed. The business plan will provide readers with mission critical information with respect to proposed strategy, operations, marketing and finance. Importantly, the business plan will show clearly the sustainable basis upon which the social enterprise is being built. Hence, directors and executives should view the business plan, not just as a planning tool, but also as a significant communications tool in their bid to influence stakeholders!
Business Planning for Social Enterprises presentation slides available at: http://www.slideshare.net/CramdenTECH/business-planning-for-social-enterprises