Social Enterprise Business Plan
What it is and why you need one
Say you are an aspiring changemaker. You might have come up with an innovative idea that might solve a compelling social problem. The process to turn that idea into a viable, sustainable social enterprise is long, complex, iterative. Among the different steps you need to take in order to ultimately get your enterprise up and running, defining your business goals and setting a clear roadmap – in other words, a plan – to achieve them becomes crucial. That is why in this article we explore the topic of “business planning” and discuss why having a social enterprise business plan is fundamental for a social enterprise’s success.
Before we start, bear in mind this..
In order for a social enterprise to be successful, founders must define both a business model (BM) and a solid business plan (BP). However, too often these terms are used interchangeably, even though they are two different notions.
As previously discussed, a business model describes the rationale of how a company intends to create, deliver and capture value. Basically, it makes explicit the foundation, the “skeleton” of the whole entrepreneurial initiative. But remember: ultimately, the chosen business model gets further detailed and articulated in the business plan.
A BM focuses the “whys” of a certain entrepreneurial project, whereas a BP describes its “hows”. As a consequence, the business plan builds on the business model, and the two cannot exist without one another. Whenever the business model changes, so must the business plan. Yet, the two terms are not one and the same!
Social Enterprise Business Plan: What it is
So, as we said, business planning builds on business modeling. In fact, it goes deep into the practicality of its implementation. But precisely, what is a social business plan?
A social business plan (SBP) is a detailed document describing the social entrepreneurial initiative. It translates the BM into clear goals, roadmaps, timelines, activities and operations, quantifying the economic/financial implications of the whole project as well as the social outcomes/impacts being pursued. As it is the reference document for planning and managing every activity related to the business, a SBP is comprised of different key sections.
- Executive summary, with a brief introductory description of the social enterprise, its history and background.
- Description of the social problem tackled, as well as the social impact mission of the organization.
- Structure and team, meaning the legal structure, governance and key people in the team.
- Business model, including target customers and core value proposition offered.
- Market analysis, which includes an assessment of market, competitors, trends in the industry and risks/opportunities.
- Marketing and sales, with a precise explanation of marketing strategy, sales tactics, distribution channels, and a summary of sales forecasts.
- Operations, focusing on the “hows” of the business model (how it will work and how the sales goals will be achieved).
- Evaluation and assessment, focusing on both financial goals and impact goals.
- Financials, with clear projections related to capital and investments, costs/revenues, as well as expected cash flow.
Lot of work, right? Sure, but a well needed one. Let’s find out why!
Social Enterprise Business Plan: Why you need one
As seen, crafting a social business plan requires a much greater effort than just defining a business model. So why it is important to have one?
To begin with, a SBP can help you stress, assess and eventually redesign your BM. True, according to Steve Blank “no business plan ever survived first contact with customers“. Yet, it’s a useful tool to address early on the feasibility and viability of your venture and eventually adjust activities accordingly.
Another reason why it’s a good idea to draft a business plan is because it allows you to identify and prioritize business assumptions to validate. As a matter of fact, assumption mapping is the first step for designing prototypes and running experiments to de-risk the whole project.
Finally, at later stages a SBP can be used internally, as internal management guide by owners, managers and internal staff, as well as externally, to convince investors, partners and stakeholders to get involved in the venture.
In this article, we dug into the main differences between business model and business plan. Also, we discussed what a social enterprise business plan looks like and why it is necessary to draft one early on.
To all aspiring social entrepreneurs out there, we strongly recommend to put time in your diary for business planning. It’s indeed a great tool to stress your business model, assess the viability and feasibility of your venture, identify critical pitfalls and hidden assumptions that might undermine it all.
We hope this brief overview was helpful to get a grasp on the topic, so that you can start move forward with creating your own business plan!
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