A business planning guide for social enterprises Putting ...

1 A business planning guide for social enterprises Putting the pieces together This guide is proudly brought to you by social Ventures australia and Parramatta City Council 1. Acknowledgements The development of this guide has been undertaken by social Ventures australia , in conjunction with Parramatta City Council. We would like to acknowledge and thank the following for their invaluable support. Your Contents generosity, wisdom and hard work have made this guide possible. Acknowledgements 2. Forth Sector kindly allowed us to borrow from and adapt the contents of their publication, A business planning guide to Developing a social Part 1 Introduction 3. Enterprise'. While originally developed for a UK audience, much of its content is highly transferable and we are grateful for the permission Part 2 Dreaming 5. to adapt it.

2 The Royal Bank of Scotland/NatWest and the EQUAL social Economy Part 3 Exploring 9. Scotland Development Partnership (including the Scottish Government). funded and supported the production of the first and second versions of Part 4 Starting Up 25. the above guide and also granted permission for the guide to be adapted. For social Ventures australia , Olivia Hilton and Miliosh Milisavljevic carried Part 5 Growing 32. out the initial development work on adapting the above guide for the Australian context. Nigel Hembrow, Kim Sokolnicki and Tatiana Peralta Appendix 1 Sources of Support 38. carried out research and development into good practice in terms of the business planning process for social enterprises . Kevin Robbie project Appendix 2 Legal Structures 40. managed the development and production process and provided content and input at each stage of the drafting process.

3 Appendix 3 business Plan Template 44. Emma Hutton provided consultancy, editorial and copywriting services to produce the final version of the guide . The development of the guide has been funded by the Parramatta social Enterprise Hub. The Parramatta social Enterprise Hub was established through a collaboration between Parramatta City Council, social Ventures australia and the Allco Foundation to support the development of social enterprises in the Parramatta Region. The Hub demonstration project commenced in July 2007 and is due for completion in June 2010. Joanne McNeill, Mark Daniels, Pablo Gimenez, Andrew Hamilton, Mandy Richards, Ruth Johnstone, Tatiana Peralta, Susan Black, Lyn Hill, Ingrid Burkett and Caroline Crosse provided valuable feedback and guidance along the way. Finally, we are particularly grateful to all the social enterprises and social entrepreneurs who have very kindly contributed their learning and examples of their work as case studies for the guide .

4 Thank you for your willingness to support the next generation of social enterprises ! 2. Part 1 Introduction INTRODUCTION. This section What is a social enterprise? Who is this guide for? sets out what social enterprises are businesses that trade for a The guide is primarily aimed at people and/. we mean by specific social , environmental or cultural purpose. or organisations interested in starting a social social enterprise, enterprise and who don't have experience of doing Like all businesses, social enterprises operate in this before. It is a step-by-step guide to thinking explains who this commercial markets, generating a profit from their about, researching, planning for, starting and then guide is for and trade. However, unlike other businesses, social growing a social enterprise, which will help you to: enterprises exist to fulfil their overriding and specific describes how it social purpose and this is at the heart of every social XX create a rigorous business plan for a sustainable is structured.

5 Enterprise, driving everything it does. social enterprise Around the world social enterprises have lots of XX obtain support for your social enterprise different kinds of social , environmental and cultural from partners purposes, reflecting the diverse needs and interests XX secure investment for your social enterprise of the communities they work in. This guide focuses XX monitor and evolve your social enterprise in on social enterprises in australia that provide future years. employment for people who are excluded from the It is also designed to be a useful resource for more labour market. Of course, many of the principles experienced practitioners, acting as a reference will also be useful for other social enterprises . point and refresher. How to use this guide This guide focuses on the extra things that you This guide focuses on social enterprises in need to think about to develop a social enterprise australia that provide employment for people compared to a straightforward commercial business .

6 Who are excluded from the labour market. It should be used in conjunction with standard business planning guidance. business Enterprise Centres provide excellent materials to help with this, available online at In addition the Brotherhood of St Lawrence has produced guidance on developing community enterprises which you may find useful. This is in the Tools and Resources section of the social Traders website at 3. business planning guide FOR social enterprises INTRODUCTION. In our experience, it is important to work through a staged process to developing and growing a social enterprise. We have broken this process down into four stages: DREAMING EXPLORATION START-UP GROWTH. Building awareness of Researching market for social enter- Revise business plan, build Expansion to new markets social enterprise through prise, testing feasibility, developing enterprise and management or new products, additional workshops, websites, and business plan and starting to raise capacity, moving towards stability equipment, capabilities seminars.

7 The capital for launch. and success in initial market. needed. XX Motivation XX Feasibility XX Launch XX Plan Growth/Scale XX Self Assessment XX business planning XX Survival XX Implement Growth/Scale XX Idea Generation XX Pilot XX Profitability XX Idea Formation We recommend you start at the beginning and Making Money Making a Difference work through the issues raised in sequence, social enterprises are social enterprises are rather than trying to jump forward too quickly. businesses like any other businesses with a difference they need to cover their they exist to fulfil their We have also learned that developing a social costs by selling their specific social purpose. enterprise involves fitting together different goods/services pieces of the puzzle'. As you move through to customers. each stage, you will find that you have more and more pieces to fit together.

8 This can be overwhelming. To avoid this, we find it useful to organise the things you need to think about under the four main pieces of the puzzle that every social enterprise has to wrestle with: Making it Work Making the Magic Because of their twin social enterprises rarely business and social aims, succeed without a little bit social enterprises are of magic and that almost complicated to run making always comes from the it work means managing person or the team of people operations, finances, driving the whole thing. compliance and people. 4. Part 2 Dreaming DREAMING. The first step in developing a social enterprise is to get your imagination going! This is where you should start thinking social enterprises are not a quick fix to creatively about different ideas for your a funding problem. social enterprise and it's also where One of the biggest mistakes that non profits make when developing a social enterprise is thinking that you need to start imagining the reality it will generate big profits to plug gaps in funding.

9 Of running a social enterprise to make this is a very dangerous misconception. If anything, sure you're ready for the challenges social enterprises will cost you money, at least in the ahead. short term. Most businesses take years before they start covering their costs to break even, let alone Whether you are an individual starting out on your generating profits. own, someone working for a non profit wanting to develop a social enterprise or a team of people social enterprises are not the only way thinking of developing a business you will need to to make a difference. be clear about your motivation for starting your Is a social enterprise really the best way for you social enterprise. The following questions should to achieve your social aims? Are you genuinely help you with this. committed to providing jobs for people who are long-term unemployed or excluded from the labour Is social enterprise for you?

10 Market through running a business . There are Before you get too carried away, it's important to alternative ways to get people back into work. And think hard about why you want to develop a social there are alternative reasons for setting up a social enterprise in the first place and to be honest with enterprise. Be clear on your motivation for wanting yourself about whether you've got what it takes to to make a difference. If employment creation make it work. through running a business is not your passion, you might be better to do something else. Here are some reality checks that you should consider before you go any further: social enterprises are expensive to run. Employing and supporting people who are excluded from the labour market comes with additional costs like reduced productivity and additional management for providing on-the-job support.