Think like a social enterprise
If a business plan is something you would put time and effort into only if a potential funder required it, you may be missing out on a valuable tool for steering your organisation to achieve its ambitions, says Chris Wykes Driver
Do small charities really need to have a business plan? Is business planning just a paper exercise to dust off for the next funding bid?
In today’s climate I would argue that business planning is fundamental to ensuring your sustainability. It requires you to think about and express what your organisation stands for, the impact of its work and its sustainability.
It can also help you show that you’re in it for the long haul. Employees don’t want to work for an organisation that lurches from feast to famine as short term funding comes and goes. Beneficiaries want reliable services that achieve longer term outcomes. And your potential donors, supporters and volunteers want to see that giving to your organisation is putting their time and money to good use. Your business plan will help you communicate convincingly that you have a viable plan for being sustainable.
In addition, thinking of your funders as customers gives you a new perspective on what you're offering them and how it meets their needs, rather than them meeting yours.
Worth the investment
Admittedly creating a business plan does involve work. Many start-ups, non-profits and social enterprises are led by people who are busy juggling priorities and whose primary commitment is to service delivery. So how would taking the time to develop a business plan help these busy people?
Make it work
Firstly, by bringing together many aspects of your operations in one place – funding strategy, aims and outcomes, marketing plans – you can see how everything fits together (or not) to achieve your vision. If it doesn’t hang together you need a re-think to bring some consistency to your planning – maybe your sales forecasts are overblown or you have underestimated your start-up costs; maybe you need to extend your reach through a marketing campaign to achieve your targets for service users.
Doesn’t it make sense to iron out these problems before you launch into service delivery or submit a funding bid for a project that is under-costed?
Staying on track
But writing the business plan is just the start of a process. It’s a tool to guide your organisation’s development and will help you assess your progress along the way. If you’re prone to wandering off course your business plan will help you stay focused on the goals you have set.
That doesn’t mean that it should become a noose around your neck, strangling creativity and innovation. You can review it and adapt it. But in doing so you will be reminded of first principles – your vision, your values and the priorities you set.
In future, in order to survive, many charities will undertake more enterprise activities, whether by direct selling of goods and services or through contracted work or a mixture of the two.
Using a social enterprise business model helps you to remain mindful of how your activities achieve outcomes for beneficiaries in line with the organisation’s mission. In particular a business plan can give you greater awareness of the financial contribution made by each service to the overall funding strategy.
Taking the time to think through and articulate a compelling business plan will make your organisation stand out from the crowd when you approach funders. But it will also give you a guiding document that can motivate you to meet targets, help you make good decisions and above all to stay on course to achieve your ambitions.
Start here! Business planning for non-profits, with Chris Wykes Driver, will help you design a practical plan to guide your organisation towards sustainability.
Bend, not break: surviving funding cuts, helps you assess where you're at financially and plan your next steps.
Find out more about these workshops by emailing Chris on firstname.lastname@example.org