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Dhon Qenderson Tod TA International
Adderston Kreigmail Park Klovenfords Gala-ils _otlandi[
Tel: 0044 1896 850414 efaks: 0044 870 132 5092 email: toddshaw@msn.com
The 3rd International Training Event - CEE Citizens Network
14th -16th September - 2004 Bankia Bulgaria.
Organizing Communities for Economic Revitalization with a focus on Social Enterprise
GUIDE TO BUSINESS PLANNING
A social or community business is, first and foremost, a business. It may be established to
help a community or group within a community and use any surplus income for good causes.
None of this absolves it of responsibility to manage as itself effectively and efficiently as a
private sector business. Indeed, its social remit places an additional burden upon it.
4.
1.
Most are written simply to convince funders to invest in
the business. However, a business plan is much more
important than this in that it can help you:
Clarify your business purpose and communicate it to
your partners
Predict future scenarios and help you deal with problems
before they threaten the business
Set targets and objects which will enable you to monitor
your performance
Your plan must be a coherent description of how you will
move from where you are now to where you want to be.
2.
Your objectives.
Why are you setting up the business and for what
purpose?
Is there a genuine need which cannot be satisfied by the
private or state sectors?
Why are you the right people to do it?
Can you sustain the involvement?
3.
Business vision and long term objectives.
Why write a business plan?
Business Description and purpose.
You must define exactly what your business will do as
specifically as possible. You should also describe your
business in terms of a mission statement which clearly
summarises its purpose and is easily understood by
partners, staff, investors and customers.
What do you want your business to be in five years?
Have you stated what steps are necessary to achieve
this and when? In particular, you should identify new
resources – funding, land, buildings – needed.
5.
Community Audit.
Where the enterprise is intended to benefit a community
or specific group within one, it may be necessary to
prepare a detailed description of it including:
a) Demographic analysis
b) Specific problems and challenges
c) Trends within these
d) Quantification of the specific needs which the e)
business will satisfy
6.
Market analysis.
For most businesses, this is about identifying customers
for your goods or services. A community enterprise may
have two distinct market groups, ie people to whom
goods or services are sold and the beneficiaries of the
activity.
(As an example, a community shop may have as one of
its aims the providing a service to the elderly or those
without private transport who cannot access shops in a
neighbouring town. It will also be trying to sell goods to
those who can. If it is not satisfying the needs of the first
group, it has lost its justification even though it may be
making a profit from the second.)
The business plan should identify and quantify all market
groups and likely trends to enable planning for the future.
It should also identify current or future competitors and
what the business’s competitive advantages are.
Adderstone Craigmyle Park Clovenfords Selkirkshire TD1 3LA
Tel: 01896 850414 email: toddshaw@msn.com efax: 0870 1325092
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Marketing Strategy and plan.
12. Business risks.
You must show a clear understanding of your market in
terms of size, location, trends and break this down into
objectives and targets for the business.
What could go wrong and what would you do about it?
There are two Irish philosophies about this. Murphy’s
Law states the “whatever can go wrong, will go wrong”.
Reilly’s Law states that “Murphy is an optimist”.
The plan explains how you will do your marketing to the
target groups, what it will cost and how you will monitor
progress.
Your plan should contain an honest awareness of the
risks involved and how you would minimise them, eg
8.
Sales target.
a) Lack of management experience – can you get
advice or mentoring?
b) Economic uncertainties – interest and exchange rate
rises
c) Reliance on key staff – do you need to train back-ups
– what happens if you are run over by a bus tomorrow?
d) Reliance on key suppliers – are there alternatives?
e) Reliance on small customer base
f) Possibility of bad debts
g) Partnership problems – can you trust them?
h) Are you vulnerable to future competition?
These should be defined clearly over time and converted
into the most important target of all which is sales
revenues.
9.
Operational requirements.
What do you need to turn your plans into action?
This should include the following aspects of the
business, specify their availability and estimate the costs
involved:
a)
b)
c)
d)
e)
13. Fun.
Premises
Equipment
Staff
Suppliers
Compliance and licensing
Are you having fun? This does not appear in most
business textbooks. In reality, a community or social
enterprise is going to be difficult to set up and need a lot
of enthusiasm from its promoters and is not likely to
make you rich. If you are not enjoying it at this stage,
ask yourself whether you really are committed to take it
all the way through. If not, get out now and hand over to
someone who is.
10. Financial requirements and forecasts.
How much money do you need now and for what
purpose?
14. Listen to advice
The business plan should include financial forecast
covering:
There is very little new in business planning so someone,
somewhere has already made every mistake you will
make and done everything right that. Most people are
happy to talk about their experiences. Seek them out
and listen to what they have to say but make your own
decisions
a) Capital/Start-up costs including working capital
b) A pre-operational cash flow up to the point where the
business starts trading
c) Operational cash flows normally monthly for the first
two years and quarterly thereafter
d) Profit and Loss accounts for the first three years
e) Forecast balance sheets to show you how financially
strong your business will be in the future.
f) A statement showing the sources of capital/start-up
funds
11. Ownership.
This is particularly important for community and social
enterprises. There are many possible legal structures.
You should be sure that the one you chose is best for
your circumstances. It should be easily understood and
operationally efficient but also ensure that the community
it serves feels involved.
If it is not obvious which kind of structure is most
appropriate for you, you should look at similar ventures
elsewhere or take professional advice.
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