Start/Change: Business Planning for Social and Sustainable Enterprise

Workshop Day 10 May 2012James Cashmore

Welcome

- Overall objective for the day – to provide you with inspiration, tools, benchmarks and “practice opportunities” to build effective business plans for your social and sustainable enterprises

- Designed for:

1. leaders of existing social enterprises who have done some business planning but need to develop their skills and experiences further

2. individuals currently leading start-up social enterprises or values-led business, who want to develop a plan for the first time

3. individuals thinking about setting up a social enterprise or values-led business

- Overall format – a combination of taught sessions, and practical group work, including a detailed case study.

Summary of the day

1. Why plan? – the benefits of business planning (1 hour) Whole group taught session (20 minutes) Group work - the role of planning in defining the purpose and overall goals of the enterprise

2. What to plan – key elements of the business plan (1.5 hours, incl coffee break) Whole group taught session (30 minutes) Group work - focussing on 2-3 of the key elements per group

3. How to plan - how to run a planning process and to make it work for your enterprise (30 mins) Whole group taught session

Lunch (60 minutes)

4. Case study (2 hours)◦ Preparation (in syndicate streams) (60 mins)◦ Presentation (45 mins)◦ Wrap-up and summary of the day (15 mins)

Overall flow of the day

1. A social enterprise business hub, based in central Cambridge

2. A community dairy, based either in the Cotswolds or in rural India

3. An on-line volunteering exchange for the UK

4. OR, a real business known to one of the group

Syndicate stream - case study business options

1. Why plan? – the benefits of business planning (1 hour)◦ Whole group taught session (20 minutes)◦ Group work - the role of planning in defining the purpose and overall goals of the

enterprise

2. What to plan – key elements of the business plan (1.5 hours, incl coffee break)◦ Whole group taught session (30 minutes)◦ Group work - focussing on 2-3 of the key elements per group

3. How to plan - how to run a planning process and to make it work for your enterprise (30 mins)◦ Whole group taught session

Lunch (60 minutes)

4. Case study (2 hours)◦ Preparation (in syndicate streams) (60 mins)◦ Presentation (45 mins)◦ Wrap-up and summary of the day (15 mins)

Overall flow of the day

Why plan?

Changes in:

◦ Broader external environment

◦ Immediate market/competitor environment

◦ Internal “environment” – within organisation, supply chain, customers, other immediate stakeholders

Business (including social business) is dynamic

1. Vision (long term direction)

2. Strategy (choice of route)

3. Anticipation (short term path)

4. Effectiveness (making the right choices – e.g. resource allocation)

5. Action planning and monitoring (staying on plan)

6. Motivation (building team alignment and energy around common goals)

In a changing world, why plan?

Creating a goal and bringing clarity to it

Understanding core purpose◦ What we are about◦ What we aren’t about

Creating unity and understanding

Acts as a reference point – a “true north”

Planning as envisioning

Making the right choices, all things considered

Sets “orientation” with regard to key stakeholders:◦ Customers◦ Suppliers◦ Competitors◦ Investors

Planning as strategy

When we get “just around the corner”, what are we going to be faced with?

What’s just ahead of us?◦ Decisions◦ Milestones◦ Disruptions and step-changes◦ Opportunities◦ And how are we going to respond (in broad

terms)? – (contingency planning)”

Planning as anticipation

What is our resource? – is it infinite?

If not, how can we deploy the resources we have most efficiently and effectively?

What’s the likely investment (econ/soc/envt) and return (econ/soc/envt)?

Planning as resource allocation

Co-ordination

Minimising waste

Monitoring and tracking

Taking corrective action

Planning as action planning and progress monitoring

Common goals and purpose?

Common strategies?

Tactics understood?

Then let’s begin....(together)

Planning as an energising tool

Vision

Strategy

Anticipation

Effectiveness

Tracking

Energy

So planning is multi-faceted

There are different stakeholders to the plan…

In a social/sustainable enterprise, key stakeholders often includes people and/or the planet

Who to plan for?

Concerns differ Stakeholder balance But also stakeholder interconnectedness

What are the likely concerns of each stakeholder?

1. Shareholders vs environment2. Communities vs shareholders3. Customers vs suppliers4. Employees vs customers

What happens to an organisation when stakeholders get out of balance?

Plan needs to consider all stakeholders

But plan view needs to “sliceable” for the perspectives of different groups

Implications for planning

1. A social enterprise business hub, based in Cambridge

2. A community dairy, based either in the Cotswolds or in rural India

3. An on-line volunteering exchange for the UK4. OR, a real business known to one of the group

Syndicate stream - case study business options

Same choice for the whole dayBut - it’s the overall thinking that’s important, not the business specifics

End of section

1. Why plan? – the benefits of business planning (1 hour)◦ Whole group taught session (20 minutes)◦ Group work - the role of planning in defining the purpose and overall goals of the

enterprise

2. What to plan – key elements of the business plan (1.5 hours, incl coffee break)◦ Whole group taught session (30 minutes)◦ Group work - focussing on 2-3 of the key elements per group

3. How to plan - how to run a planning process and to make it work for your enterprise (30 mins)◦ Whole group taught session

Lunch (60 minutes)

4. Case study (2 hours)◦ Preparation (in syndicate streams) (60 mins)◦ Presentation (45 mins)◦ Wrap-up and summary of the day (15 mins)

Overall flow of the day

What to plan?

Different types of plan

Enterprise vs functional/team

Strategic vs operational

What to plan

Contents of a plan

The plan as a series of components

Some suggested plan contents

Some suggested plan contents (2)

1. Executive Summary2. Background (to the enterprise)3. Purpose and proposition4. The market: competitors, sales and marketing5. Operations6. Management team/people7. Projections (including financials, and non-

financial impacts). Also use of funds.8. Risks9. Plan/timelines

Key elements of a “whole business” plan

1. Executive Summary2. Background (to the enterprise)3. Purpose and proposition4. The market: competitors, sales and

marketing5. Operations6. Management team/people7. Projections (including financials, and non-

financial impacts). Also use of funds.8. Risks9. Plan/timelines

Key elements of a “whole business” plan

Aims◦ Demonstrate that there is a market for the

product/service proposition that can support the projections

◦ Show that the competition is known and understood

◦ Define the target customer

◦ Demonstrate your advantage versus competitors

◦ Summarise the likely marketing mix

◦ Demonstrate the sales process (differs for B2B vs B2C)

The market: competitors, sales and marketing

Potential tools

1. SWOT analysis, with key implications (SWOT + “so what”)

2. Competitor analysis (e.g. Porter’s 5 forces for assessing industry competitiveness, Porter’s generic strategies for a firm or enterprise)

3. Product and market analysis (Ansoff)

The market: competitors, sales and marketing

Operations: adding value by turning inputs into outputs

Operations: the value-adding process

Management team◦ Experience and skills◦ Motivation and reward

Organisational structure and capability assessment (incl. strategic hires)

Employees (incl. volunteers etc.)◦ Recruitment and training◦ Motivation and reward◦ Development and progression◦ Performance management

Management team/people

Key assumptions◦ The value added model (unit revenues and costs)◦ Volumes (incl. breakeven analysis)

Financial statements◦ Profit and loss◦ Cashflow forecast◦ Balance sheet

Risks and sensitivities

KPIs – financial; social/environmental

Projections

What to plan? – syndicate exercise 2

End of section

1. Why plan? – the benefits of business planning (1 hour)◦ Whole group taught session (20 minutes)◦ Group work - the role of planning in defining the purpose and overall goals of the

enterprise

2. What to plan – key elements of the business plan (1.5 hours, incl coffee break)◦ Whole group taught session (30 minutes)◦ Group work - focussing on 2-3 of the key elements per group

3. How to plan - how to run a planning process and to make it work for your enterprise (30 mins)◦ Whole group taught session

Lunch (60 minutes)

4. Case study (2 hours)◦ Preparation (in syndicate streams) (60 mins)◦ Presentation (45 mins)◦ Wrap-up and summary of the day (15 mins)

Overall flow of the day

How to plan?

Typical outcomes of a plan

What would being “well planned” feel like?

What would being unplanned feel like? What would you see/hear in a planned

environment?

Plan outcomes

Like anything, planning can be done badly or well.

What really makes the difference?

Is there a right or a wrong way? – or does it depend on the organisation?

How to plan

The process of creating the plan is as important as the plan itself

Different plan elements require different approaches and mindsets

Planning is a process of alignment and sharing

The plan needs to fit the organisational context

The plan needs to fit the organisational context

Participating in, or leading, a planning process requires an understanding of:

◦ Why are we planning? – what’s the emphasis (e.g, between the 6 dimensions)

◦ Who are we planning for? (stakeholders)

◦ What are we planning? (scope)

◦ What are the outcomes we are seeking?

How to plan

Stages of a typical planning process

1.

2.

3.

Decisions to make before you start planning

- How important is my planning process? (as opposed to the plan outcome/content). Which of the following are going to help me:

- Wide awareness of the plan- Commitment to the plan from others who will help

deliver it- Validation/checking of the plan

- Who do I want to create the plan? And who will review it? And who will use it?

MeMe + Senior teamEveryone

Choosing your planning process

- An event?- A one–off process? (e.g. over several weeks/months)- A continuous/cyclical process?

Choosing the right process also depends on the kind of plan you want/need- strategic- operational/tactical- financial

Metrics Tracking Accountability – linked elements  How will I know if I have implemented my

plan?

Living with your plan

Case study – syndicate exercise 3

End of section

Overall objective for the day – to provide you with inspiration, tools, benchmarks and “practice opportunities” to build effective business plans for your social and sustainable enterprises

1. Why plan – the benefits of business planning

2. What to plan – key elements of the business plan

3. How to plan - how to run a planning process and to make it work for your enterprise

4. Case study

Summary of the day