Business Planning for Social Enterprise

A Presentation for Social Enterprise Cambodia Conference4 April 2015

William P. Kittredge, PhDPresident, Cervelet Consulting

Why Have a Business Plan?

Value lies in the process of researching and thinking

about your business in a systematic way

The act and learning process of making a business plan

may make you a better entrepreneur

Allows you to avoid big mistakes by developing a game

plan1

1http://www.inc.com/articles/201107/5-reasons-why-you-need-a-business-plan.html

Why Have a Business Plan?

One survey study shows that startup companies

who completed business plans were almost twice as likely to effectively expand their businesses or acquire capital compared to those

who didn’t.2

2http://smallbiztrends.com/2010/06/business-plan-success-twice-as-likely.html

General Company Description

Products and Services

What factors will give your product or services competitive advantage or

disadvantage?

What are the pricing, fee, or leasing structures of your products or services?

Marketing Plan

Marketing PlanMarket Research

Why? Make sure your business is on track

How? Public information & gathering your own data

Economics:What is the total size of your market?

What are its growth potential and opportunities?

What barriers to entry do face?

ProductFor each product or service What are the most important features and why? What will the product do for the customer?

Marketing Plan

Customers: Who are your target customers (businesses or consumers)?

What are their characteristics (demographics)?

CompetitionWhat products and companies will compete with you?

How will your Competitive Analysis look?

Marketing Plan

Marketing PlanNiche

How does your company fit into the world?

StrategyPromotion: How will you get the word out to customers?

Promotional Budget: How much will it cost to get the items needed for promotion?

Location: Is your location important to costumers? Is it convenient?

Distribution Channels: How will you sell your products/services?

Marketing Plan: Sales Forecast Spreadsheet

Attaches numbers to your plan

Based on historical sales, marketing strategies, market research, industry data

Two forecasts: “best guess” and “worst case”

Operational Plan

Management and Organization

Who will manage the business on a day to day basis?

What experience does that person bring to the business?

What special and distinctive competencies?

What is the plan if this person is lost in incapacitated?

Management and Organization

Identify and list professional and advisory support– Board of directors– Management advisory board– Attorney – Accountant– Insurance agent– Banker– Consultant(s)– Mentors and key advisors

Personal Financial Statement

Shows assets and liabilities held outside the business and personal net worth.

Startup Expenses and Capitalization

• Estimate expenses. Where you need sufficient capital?

• Your startup business may cost more than you anticipate• Add “padding” to the budget• Add separate “contingencies” to account for the unexpected

• Explain your research, sources, amounts, and terms of proposed loans.

• Explain how much each investor contributes and what percent of ownership each will have.

Startup Expenses and CapitalizationSpreadsheet

Financial Plan• 12-month profit and loss projection What it

will take to make a profit and be successful?

• 3- year profit and loss projection Optional projection if company wants to forecast longer term

• Projected cash flow Plan how much you need before startup for preliminary expenses, operating expenses, and reserves

Financial PlanProfit and Loss Projections

Financial Plan

• Opening day balance sheet what assets the company holds, what its liabilities are

• Break-even analysis predicts sales volume at a given price required to recover total costs

Financial Plan

Financial Plan

Break-Even Point Q = Fixed Cost / (Unit Price - Variable Unit Cost)

Appendices

• Include details, studies, graphs and charts in your business plan, for example:

• Brochures and advertising materials• Industry and market research studies• Blueprints and plans• Maps and photos of location• List of equipment owned and to be purchased• Copies of leases and contracts• Letters of support• List of assets available for a loan

Refining the Plan

For Raising Capital

Bankers: Amount of loan, how the funds will be used, what will it accomplish, requested payment terms

Investors: Funds needed for short term and long term, how the funds will be used, estimated return on investment, exit strategy for investors, financial reporting

Refining the PlanFor Types of Business

Refining the PlanFor Types of Business

Refining the PlanFor Types of Business

Refining the PlanFor Types of Business

Cervelet Management & Strategy Consultants, LLC

Www.cerveletconsulting.com

We have developed some expertise assisting social enterprises in Cambodia and Thailand. If you have further

questions or would like to inquire about our business planning or social investor recruiting services, please contact

us via our webpage or through Facebook.