Business Plan

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Last Revision: January 1, 2021

For SEC 691b

Social Business

Planning Template

& Guidance

Document

Social Business Plan Template

Table of Contents 1.0 Executive Summary ................................................................................................................................ 4

2.0 Venture Description and Goals ............................................................................................................... 5

2.1 Venture Description ............................................................................................................................ 5

2.2 Description of Product or Service ....................................................................................................... 5

2.3 Overview of Parent Organization ........................................................................................................ 5

2.4 Business and Social Goals ................................................................................................................... 5

2.5 Guiding Principles ............................................................................................................................... 5

3.0 Industry and Customer Analysis ............................................................................................................. 7

3.1 Industry Overview, Outlooks/Trends and Best Practices ................................................................... 7

3.2 Description of Customer Need ............................................................................................................ 7

3.3 Description of Customer(s) ................................................................................................................. 7

4.0 Competitive Analysis ............................................................................................................................... 8

4.1 Competitive Environment ................................................................................................................... 8

4.2 Profile and Analysis of Direct Competitors ......................................................................................... 8

4.3 Competitive Advantage....................................................................................................................... 8

5.0 Marketing and Sales Strategy ................................................................................................................. 9

5.1 Plan to Reach Target Market .............................................................................................................. 9

5.2 Sales Strategy ...................................................................................................................................... 9

6.0 Operations ............................................................................................................................................ 10

6.1 Description of Daily Operations ........................................................................................................ 10

6.2 Operations Process Flow ................................................................................................................... 10

7.0 Organization and Management ............................................................................................................ 11

7.1 Organization Chart ............................................................................................................................ 11

7.2 Venture Organization Chart .............................................................................................................. 11

7.3 Key Management Functions ............................................................................................................. 11

7.4 Line Staff Requirements .................................................................................................................... 11

7.5 Performance Management ............................................................................................................... 11

7.6 Board of Advisors .............................................................................................................................. 11

Social Business Plan Template

8.0 Financials ............................................................................................................................................... 12

8.1 Financial Overview ............................................................................................................................ 12

8.2 Key Assumptions ............................................................................................................................... 12

8.3 Break-even Analysis .......................................................................................................................... 12

8.4 Projected Financials .......................................................................................................................... 13

8.4.1 Income Statement ...................................................................................................................... 13

8.4.2 Cash Flow Statement ................................................................................................................. 13

8.5 Sensitivity Analysis ............................................................................................................................ 13

9. Risk Management ................................................................................................................................... 14

9.1 External Risks .................................................................................................................................... 14

9.2 Internal Risks ..................................................................................................................................... 14

10. Appendices ............................................................................................................................................ 15

Social Business Plan Template

1.0 Executive Summary The Executive Summary should provide an enthusiastic snapshot of your venture, explaining

what you do and why it will succeed. The Executive Summary is supposed to be written last and

is expected to be 2 pages or less. After reading this section, the reader will have a basic

understanding of your venture. Resist the temptation to “cut and paste” from each section and

instead craft a compelling summary. The Executive Summary should stand alone and leave the

reader wanting to learn more.

a. Business/Program Description and Goals

This section should be written so that a reader unfamiliar with your venture and/or

parent organization will be able to comprehend the information.

• What is your venture?

• What product/service will you offer?

• What are your business and social goals? How will you measure and evaluate

them?

• Who is the parent organization?

b. Market Need

• What customer need(s) does your product/service address?

• Who is your target market(s)?

• Why will they buy from you or give you a grant?

c. Competitive Analysis

• How would you describe the competitive environment?

• What is your market niche?

d. Organization and Management

• Identify key management functions and the person who will fill the role. Include

information on background/skills that are relevant to the venture and will enable

them to succeed in their role.

e. Marketing and Sales Strategy

• Identify key components of your marketing strategy.

• What is your sales process and why will it be successful?

f. Financials

• Briefly define your business model: customer value proposition, profit formula,

key resources and key processes.

• Include key financials, such as revenue and profit for years 1-5 as well as capital

requirements.

Social Business Plan Template

2.0 Venture Description and Goals Begin this section with a brief introduction to your venture, the product or service you will offer,

and the parent organization (if applicable). You will also include information on your business

and social goals, as well as your venture’s guiding principles.

2.1 Venture Description This is your opportunity to tell your story and demonstrate your credibility. Consider answering

the following questions:

a. What is your venture? How did you get started? How did you generate the idea for your

venture?

b. What is the purpose of the venture?

c. What is your value proposition? What problem are you solving for the customer? Why

will they purchase from you? How does your venture improve the status quo?

d. Why are you the right organization to pursue this venture?

e. What is the legal structure of the venture? For example: independent entity or

department/division within the nonprofit/parent organization.

2.2 Description of Product or Service What are the product(s)/service(s) that the venture will offer? Include information on current

offerings as well as proposed future offerings.

a. What are the core elements?

b. What are the success factors?

c. Are you planning to scale the program to new geographic areas or audiences?

2.3 Overview of Parent Organization (If Applicable) a. Who is the parent nonprofit/for-profit organization?

b. What is the mission of the organization?

c. How will the parent organization support the venture? What is the relationship between

the two entities? How is it governed?

2.4 Business and Social Goals a. What are the short-term and long-term business goals for the venture?

b. What are the short-term and long-term social goals for the venture?

a. What is your theory of change?

b. What is your logic model?

2.5 Guiding Principles Guiding principles are a set of statements that identify the values and beliefs of the organization.

Guiding principles can be thought of as “requirements” or “non-negotiables” that must be

met/adhered to throughout the life of the venture. Guiding principles can be differentiated by

those related to business operations vs. social/community impact.

Social Business Plan Template

a. Identify 3-5 business guiding principles. For example:

• What is the maximum amount of capital that the nonprofit/parent organization

is willing to invest? What is the maximum amount of capital that the

nonprofit/parent organization is willing to borrow?

• What is the maximum amount of financial losses the nonprofit/parent

organization is willing to cover per year?

• When does the parent organization need the venture to be self-sustaining?

b. Identify 3-5 social/community guiding principles. For example:

• Will individuals from a disadvantaged population be targeted for employment?

What skills will they acquire?

• Are there restrictions/limitations regarding suppliers?

• How will the environmental impact be limited/monitored/managed?

• How will the profits of the venture be used?

Social Business Plan Template

3.0 Industry and Customer Analysis This section begins with a discussion of the industry (or environment) that your venture will

operate in, as well as the outlook, trends and best practices of the industry. The focus then

narrows to a description of the customer need that your product or service addresses. Lastly,

your target market is defined and described.

3.1 Industry Overview, Outlooks/Trends and Best Practices a. Industry Overview

• What is your venture’s industry? How is it described? What does it include? Is

there a primary and a secondary?

• What is the size of the industry? For example: number of companies working in

industry, annual sales, annual profit or number of customers.

• How is the industry segmented? What industry segment will you focus on?

b. Industry Outlook and Trends

• What is predicted for the industry in the short and long term?

• What are the 3-5 most important trends (positive and negative) impacting the

industry? How will these impact your venture?

c. Industry Best Practices / Critical Success Factors

• What are the best practices in the industry that make the difference between

success and failure? How will you ensure that your venture institutes these?

• What does it take to thrive in this industry? How will you operationalize this?

3.2 Description of Customer Need a. What customer needs does your product or service address? Include data from primary

customer research. b. What evidence do you have that customers are willing and able to pay for a product or

service that addresses these needs?

3.3 Description of Customer(s) a. Who is your target market?

a. What does your ideal customer look like? b. What is most important to your target market? For example: price, quality,

brand, convenience and/or customer experience. b. What is the size of your target market?

a. How much do they spend on similar products or services? c. What are the 3-5 most important trends in your target market? How will these impact

your venture? d. Why did you select this target market?

Social Business Plan Template

4.0 Competitive Analysis This section begins with a brief introduction to the competitive environment, and then narrows

to profile your direct competitors. After discussing your direct competition, the section

concludes with a description of how your venture is different and why it will be valued by

customers.

4.1 Competitive Environment Begin with a brief description of the competitive environment. How would you describe the level

and intensity of competition? Are there any major trends impacting the competitive

environment? Are there any best practices that are essential to success?

4.2 Profile and Analysis of Direct Competitors Create a matrix that profiles your direct competitors and include your venture in the matrix.

Make sure to determine the possible areas for competition – based on what the customer cares

about – and identify how each competitor responds. Include only factors that are relevant and

obtainable, which may include:

• What is their target market?

• What is their product/service?

• What customer needs does their product/service satisfy?

• What are their key strengths/weaknesses?

• How is their product/service positioned?

• How is their product/service priced?

• How do they promote their product/service?

• What are their hours of operation?

• What is their annual revenue and/or profit?

4.3 Competitive Advantage • How is your product or service different from competitors? What sets you apart?

• What is your competitive advantage? Describe how this is unique, sustainable, difficult

to replicate and valued by customers.

Social Business Plan Template

5.0 Marketing and Sales Strategy Begin with a brief description of your target market and how you will apply key marketing

components to competitively sell your products and services.

5.1 Plan to Reach Target Market a. Positioning

• What customer needs does your product or service meet?

• What distinguishes your product or service from other available options?

b. Pricing

• What are your pricing strategies? Do you intend to generate a profit or

breakeven?

• What is the price for your products/services?

• What are your pricing tactics? For example: flat fee, sliding scale or package

options.

c. Promotion

• What is your promotion strategy?

• What tactics will you use to increase awareness of your products or services? For

example: personal outreach, direct marketing, advertising, sales promotions

and/or public relations.

d. Place (Distribution)

• Where will customers be able to purchase your product or service? What

distribution outlets will you use?

5.2 Sales Strategy a. Sales Structure

• What is the sales process?

• Who is responsible for sales and how are they compensated/rewarded?

b. Sales Targets

• Monthly for Year 1

• Annual for Years 2-5

Social Business Plan Template

6.0 Operations This section provides the reader with a detailed description of the lifecycle of your

product/service.

6.1 Description of Daily Operations Begin with a brief overview of the process required to produce your product or deliver your

service. Consider addressing the following elements:

a. People

• What people are needed? What roles do you need to fill?

• How will you train staff? How frequently? In what?

• How will the process be supervised? Who will supervise?

b. Capital and Equipment

• What capital is needed?

• What equipment is needed?

• What types of facilities are needed?

c. Materials

• What materials will be used?

• Where will you purchase materials?

• How will supplies/inventory be managed? Who is responsible?

• How will you manage your supply chain?

d. Systems

• What systems need to be developed?

• What are the working hours?

• Who is responsible for planning/scheduling?

• What is the process to fulfill orders and deliver your product/service?

• How is customer service monitored?

• What is your capacity in product/service?

• How will you distribute/deliver your product/service?

e. Measurement and Evaluation

• What are your productivity goals and how will you measure them?

• What are your program/venture outcomes and how will you measure and

evaluate them?

6.2 Operations Process Flow Create a diagram that identifies each step required to produce your product or deliver your

service if needed/appropriate.

Social Business Plan Template

7.0 Organization and Management This section identifies the structure of both the parent organization (if applicable) and the

venture, as well as clarifies the relationship between the two. Key management and staffing

needs are also discussed.

7.1 Organization Chart Include a high-level organization chart of the organization which highlights/identifies the

relationship between the parent organization (if applicable) and venture. If the parent

organization will manage/oversee the venture, make sure to include information on this

relationship. Briefly describe any agency-level support that the parent organization will provide

the venture. This may include back office support functions such as accounting or

administrative support, type and percentage of time from the Executive Director and/or

management team or reporting requirements.

7.2 Venture Organization Chart Include a detailed organization chart for the venture.

7.3 Key Management Functions Identify each key management position as well as the associated roles and responsibilities. If

you know who will assume the position, include a brief description of their experience and why

they will succeed in this role. Include succession plans, if available.

7.4 Line Staff Requirements Identify the line staff required, including a description of duties, skills needed and training

required.

7.5 Performance Management Describe how you plan to manage performance and incentivize management and line staff. Consider addressing the following questions:

• What performance standards will be used to monitor management and line staff?

• What are acceptable performance standards for management and line staff?

• What procedures will be used to monitor performance?

• Who is responsible for monitoring performance?

• How will management and line staff be incentivized?

7.6 Advisory Council Describe the role of the Advisory Council and how their involvement will benefit the venture.

Include a list of members, including bio, in the Appendix.

Social Business Plan Template

8.0 Financials This section is one of the most critical for the entire business plan – many readers skip directly

to this section after reading the Executive Summary. Key financial highlights should be included

in the text along with graphs or charts that help to illustrate key content. In addition, financial

spreadsheets should be included in the Appendix.

8.1 Financial Overview a. Business Model Description:

• How will your venture make or raise money? Who are your current funders?

What is your projected funding by source?

• What is your customer value proposition?

• What is your profit formula (if applicable)?

• What key resources are needed to deliver the customer value proposition

profitably or at break-even?

• What key processes are needed to compliment the key resources and ensure

profitable delivery to customers?

b. Financial Targets: Describe the major financial targets for your venture and why you

believe you will be able to reach them. Consider including:

• Overarching financial goal

• Projected revenue growth in Years 0-5

• Projected profit margin in Years 0-5 (if applicable)

• Projected capital needs for Years 0-5

8.2 Key Assumptions a. Start-up Assumptions: Identify all of the major types of expenses and your estimate for

each category. This may include sales/marketing, administrative/management,

overhead, rent, equipment, depreciation, and taxes.

b. Growth Assumptions:

• Revenue: growth per year in whatever unit makes sense. For example:

percentage, number of customers, products sold or dollars.

• Cost of Goods Sold: growth per year in whatever unit makes sense, but should

generally align with revenue unit. (If applicable)

• Business Expenses: growth per year for each category of expense. Note that some

are fixed costs and will not grow.

• Sources: growth per year in sources of revenue. For example: percentage of

earned revenue versus grants.

c. Industry Rules of Thumb: Identify any industry rules of thumb that are important in

your financial analysis and models. This may include a standard sales mark-up, credit

terms and/or operational efficiency.

8.3 Break-even Analysis Describe under what conditions the venture will break-even, not including any social costs. How

many units of your product or service need to be delivered? How long do you anticipate it to

take?

Social Business Plan Template

8.4 Projected Financials You should create two types of projected financials: income statement and cash flow statement.

For the first year, create the projections on a monthly basis. For Years 2-5, create an annual

projection. The actual statements should be included in the Appendix – highlight the key points

in the text.

8.4.1 Income Statement

a. Bottom Line

• What are your annual revenue projections for the first 5 years?

• What are your projected cost of goods sold for the first 5 years?

• What is your expected annual income for the first 5 years?

8.4.2 Cash Flow Statement

a. What is your annual cash flow for the first 5 years?

b. How much cash do you project to have at the end of each year?

c. What are the major inflows of cash from operations, investments and financing

activities?

d. What are the major outflows of cash from operations, investments and financing

activities?

8.5 Sensitivity Analysis What are your most critical financial assumptions? What happens if these assumptions change?

Insert results of various what-if scenarios, using your financial models. Assumptions to consider

changing include: sales growth, price, cost of goods sold and staffing levels.

Social Business Plan Template

9. Risk Management Begin this section with a brief introduction to the key (2-4) risks that could impact your venture,

and the mitigation strategies you have identified to manage or reduce each risk. Remember,

risks can be both positive and negative.

9.1 External Risks a. What are the primary external (macro) risks to your venture? For example:

• What if a law/regulation changes?

• What if a new technology is developed?

• What if a direct competitor drastically drops prices?

b. What impact will each risk have on your venture?

c. How can you mitigate or manage each risk? What is your contingency plan?

9.2 Internal Risks a. What are the primary internal (micro) risks to your venture? For example:

• What if a key manager resigns?

• What if demand is higher than anticipated?

• What if costs are higher than budgeted?

b. What impact will each risk have on your venture?

c. How can you mitigate or manage each risk? What is your contingency plan?

Social Business Plan Template

10. Appendices Include supporting documents, such as:

a. Sample marketing materials

b. Resumes of key management and/or job descriptions

c. Copies of press articles and/or advertisements

d. Spreadsheets with financial pro-formas

e. Financial Audit of Parent Organization

f. Detailed results from primary market research

g. Evaluation results

h. Primary market research data collection templates (surveys)

i. Advisory Council (including bios)

j. Implementation Workplan (including tasks, responsible party and deadlines) for

implementing your business plan.

Social Business Plan Template

Definitions

• Business Model: A business model describes how your company creates, delivers and captures value. It is not just a product or program – it is a series of intentional decisions you make to create a full experience for your clients that provides value. For for-profits, that value translates into clients paying for products or services. For nonprofits and social entrepreneurs, that value is paid for by funders and donors as well as clients (possibly). The essence of a business model is that it defines the manner by which the business enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit: it thus reflects management’s hypothesis about what customers want, how they want it, and how an enterprise can organize to best meet those needs, get paid for doing so, and make a profit.

• Capital: Cash or goods used to generate income by investing in a business.

• Customer: Used within a program referring to a client or grantmaking organization or

used within business as a person willing to exchange money for goods and/or services.

• Supply Chain: A system of organizations, people, technology, activities, information and

resources involved in moving a product or service from supplier to customer.

• Unique / Value Proposition: A unique value proposition is a simple and clear statement

that tells your customers how you serve their needs, what benefits they receive and why

you are better than or different from the competition. It is your organization’s sweet spot

and defines how you stand out from the crowd. It can be explicit or implicit. Unique

value proposition should be easy to identify and recall because it creates a powerful

association with the organization’s brand. It should serve as the centerpiece of

your marketing message. But, it should vary based on your intended customer – client,

donor, volunteer or employee.

• Venture: Either program or business serving the public good.

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