TOPIC 4

Social Enterprise Business Plans

Purpose of a business plan
The business model is a internal blueprint for an enterprise,
whereas business plan is a document detailing the enterprise.

MISTAKE
A formal business plan is necessary to cover adequately all
the details necessary for key stakeholders to understand the
venture as well.
It gives the entrepreneur greater reach.
It motivates people involved in the venture by summarizing
the ideas , opportunities, goals and objectives.
It forces the social entrepreneur to tie up all of the enterprise’s
loose ends before launching the venture.
The business plan, has two kinds of audiences, external and
internal.

a) External
• Actual and potential funders – need full information of social venture
• Government officials - collaborate with the government or want
government support
• The Community – can be important adversaries

b) Internal
• The social entrepreneur – clarifies and codifies all of the important
elements of the enterprise
• Actual and potential staff and volunteers – people working for a social
enterprise
• Board members – vested with legal and moral responsibility
Almost all of the business plan descriptions are similar:
1. Business plan summary
2. Description of the enterprise
3. The team
4. The market and industry
5. Marketing and fundraising
6. The financial plan
7. Goals, and objectives, with a timeline
8. Risk assessment
9. Supporting documents
 BUSINESS PLAN SUMMARY
This is an abstract of the whole plan that is generally a page or so
and answers only the key questions:

• What is the venture?

• Why is it new and important?
• Who will benefit from it, and how?
• How (in general terms) will the idea be executed?
• Who is the social entrepreneur, and what unique skill, service, or
background does he or she (or they) bring to the venture?
• What kind of support for the enterprise is needed, and how much of it?
• What will constitute success?

The summary is the first part of the business plan, usually written last,
after the other parts.
 DESCRIPTION OF THE ENTERPRISE
The main body of the business plan contains the most
important information for both the social entrepreneur and
the stakeholders.

This includes the following elements:

• The idea, and why it is an authentic opportunity
• The mission statement
• Definition of value, and how it is to be measured
• Key innovations or adaptations
• Competitive advantage
• The social enterprise’s legal structure
• Current status of enterprise
 Case Study 2
First Book Marketplace
First Book is a non-profit founded in 1992 to help poor children own their
books. Since that time, the organization has distributed more than 40
million books nationwide in communities in communities across the
United States. In 2004, the organization started a new enterprise called
First Book Marketplace to help nonprofits and government agencies
acquire books for kids in their communities at a low price.
Here is how the First Book Marketplace business plan
summarized the evidence that this idea was an authentic
opportunity:

In July 2004, First book (FB) quietly launched a pilot of the First Book
Marketplace. The pilot has exceeded expectation, generating over
$366,000 in sales and 209,000 books to 320 programs. Registration,
processing, ordering, and fulfillment were accomplished, and no
substantial challenges have arisen.
 http://www.firstbook.org/first-
book-story/innovation-in-
publishing/marketplace

RabihaUNITAR
 THE TEAM
Now the social entrepreneur demonstrates that there is a
qualified, competent, enthusiastic team in charge of his or her
enterprise. This team includes:
• Management – describe the management team’s
qualifications and experience, focusing in particular on the
education, work experience, life experience, and networks.
• Board – a non-profit is necessary to assemble a Board of
Directors to overseeing the enterprise, performing
administrative functions, lending expertise, giving and
fundraising, and enhancing the enterprise’s image
• Advisors – goes well beyond the legal Board.
• Early donors
 THE MARKET AND THE INDUSTRY

This section describes the industry, the enterprise’s target

market, and its expected in this market.
• Industry description- to describe the industry’s most
important points.
• Target market – the first opportunity to explain who exactly
will benefit from the enterprise’s services.
• Expected position and share in target market – to describe
fully the evidence that the social opportunity is authentic
and viable.
 MARKETING AND FUNDRAISING
The business plan now turns to the social entrepreneur’s plans
to raise resources and publicize the venture.

• Fundraising targets and strategies

• Personal relationships
• Direct mail
• Media
• Virtual means
• Grant-writing plans – seek to procure funding from government
agencies and foundations.
• Pricing plans – will the enterprise charge fees for its services?
• For-profit activities – related to the earned income
• Marketing
 THE FINANCIAL PLAN

The plan should cover several financial areas, including the

following:
• Financial needs for 3-5 years
• Financial projections
• Income statements
• Cash-flow projections
• Balance sheets
 GOALS AND OBJECTIVES

It is time to tell potential supporters what success means in

terms of this measure – and provide a roadmap for getting
there:
• Definition of success – start by openly stating the enterprise’s
ultimate goal. A goal should be motivational but not
infeasible.
• Intermediate goals and success measures – The
intermediate goals are important toward the ultimate goal of
the enterprise.
• Evidence that goals can be achieved
• Timeline
• Start of the enterprise
• Incorporation
• Acquiring staff, space, and equipment
• Delivering services
• Projected cash flow
• Growth milestones
• Attaining key goals
 Case Study 2
The Bakery Cafe
 In 1996, Haley House, a
Boston nonprofit dedicated
to helping the poor achieve
economic independence,
established the Bakery Café,
a bakery-training program
for low income men and
women.
A restaurant open to the
public, staffed partly by
people training for jobs in
high-quality food
preparation.
The Bakery Café’s
business plan listed
several performance
measures:
1) Performance
milestones
2) The number of
community events we
have participated in
3) Customer usage of
coupons
4) Our weekly retail
revenues
5) Visits to our website
http://haleyhouse.org/
 RISK ASSESSMENT

• Financial risk – The most obvious risk for any business plan.
• Legal risk
• Talent risk – rely critically on the involvement of the
entrepreneur and the team.
• Environmental risk – can be classified in three areas; political
and governmental risk, economic risk and demographic risk.
• Other risks
 SUPPORTING DOCUMENTS

• Résumés for the key participants in the enterprise

• Data sources cited in the plan
• References for literature cited in the plan, if any
 PITFALLS
• Failing to communicate realistic goals
• Failing to anticipate problems
• Lack of commitment or dedication to the venture
• Lack of experience
• Failure to demonstrate market niche