A Toolkit for Developing a Social Purpose Business Plan

1 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> >>>>>>>>>>A Toolkit for Developing a Social Purpose Business PlanSeedcoInnovations in Community DevelopmentFunding provided by Mizuho USA FoundationCopyright 2004 Structured Employment Economic Development Corporation (Seedco)All rights Acknowledgements How to Use this Toolkit Seedco and the Nonprofit Venture NetworkPart I: Getting Started Key Elements of a Social Purpose Business Testing for Mission-fit Taking Inventory of the Organization External Context Tying it all Together Building a Business : Recycle-A-Bicycle A Framework for Planning: Introduction to PM&MSM Addressing Organizational ChangePart II: The Business Plan The Executive Summary Market Opportunity Business Model Operations Management and Stakeholders Social Outcomes FinancialsPart III: Resource Guide Pitching Your Business Working with Consultants Understanding Financial Statements GlossaryPart IV: Worksheets, Templates and ExamplesPart V: Sample Business PlanSeedcoInnovations in Community Developmentideveloping a Social Purpose Business planintroductionA Toolkit for Developing a Social Purpose Business Plan grows out ofSeedco's recognition that many nonprofits are eager to launch businessventures but lack targeted resources to help them through the planningprocess.

2 Over the past three years, the Nonprofit Venture Network (NVN)has provided intensive technical assistance to 21 nonprofit organizationsin New York City and Tampa Bay and has conducted introductoryworkshops with more than 250 nonprofits interested in Developing socialpurpose businesses. Based on our experience and expertise, we designedthis step-by-step Business planning guide especially for nonprofitorganizations. It is our hope that it becomes a valuable resource toorganizations exploring the possibility of Social enterprise and to moreseasoned entrepreneurs. The Toolkit was created under the supervision of Jaycee Pribulsky, SeniorProgram Manager. Content was developed by a Seedco team includingSarah Eisinger and Rosanna Perry-Stephens, and led by Dawn Techow.

3 Ateam of Seedco staff including Tracey Allard, Khary Cuffe, RachelBluestein and Nikhil Gadkari reviewed the document and providedinsightful feedback. Asif Karmally, an intern from the New YorkUniversity, Stern School of Management also assisted in writing andediting this document. Mimi Grinker and Betty Rauch kindly edited andproduced the document. Giona Maiarelli of Maiarelli Rathkopf Designdesigned the Toolkit with assistance from Josh Reisner at Seedco. Special thanks to Karen Overton, Executive Director of Recycle-A-Bicycle, for graciously allowing us to pick apart her Business plan and useit as an example. She has been a strong supporter of the NonprofitVenture Network and we value her enthusiasm and dedication to socialenterprise.

4 The development of the Toolkit would not have been possible withoutsupport from the Mizuho USA Foundation. We are especially thankful tothe foundation's Executive Director, Lesley Harris Palmer, for hersupport of the Nonprofit Venture Network since its inception. NVN has also been supported by the MetLife Foundation, the United Wayof New York City, the Eckerd Family Foundation and the World TradeCenter Small Business and the Non-Profit Assistance CorporationJanuary 2004 Foreword and Acknowledgementsiiideveloping a Social Purpose Business planintroductionSocial Purpose Business Development:How to Use this ToolkitWhy a Social Purpose Business Planning Toolkit ?A Social Purpose Business is a Business activity started by a nonprofitorganization that applies market-based solutions for the purposes offurthering the mission of the organization, generating income, andaddressing Social needs.

5 Over the past five years, the Social enterprise fieldhas grown significantly. Nonprofits are seeking innovative methods ofdiversifying their revenues and building more sustainable a result, nonprofits are seeking assistance in Developing and launchingthese ventures. While starting a Social Purpose Business shares many characteristics withdeveloping a traditional small Business venture, there are markeddifferences. Most importantly, you are not an individual have stakeholders and clients, funders and staff who follow a missionto provide a needed service to the community. All of these constituentshave opinions and ideas about how the organization should best use itsresources. In addition, decision-making may happen at multiple levels,the organizational culture may be resistant to becoming more Business -like and staff may fear mission creep.

6 On the flip side, as an organizationrather than an individual, you may have access to more resources, be ableto build a planning team consisting of diverse backgrounds and expertise,and have a proven reputation in the Social Purpose Business Planning Toolkit takes the organization intoconsideration throughout the planning process. In addition, the BusinessPlan you develop with this Toolkit will highlight the Social components andsocial outcomes of the Business . As a communications tool, these sectionsare important to your staff, Board and clients as they show the way that theorganization and clients will benefit. In addition, these sections areimportant to socially conscious funders who are seeking a Social return ontheir Should Use this Toolkit ?

7 The Social Purpose Business Planning Toolkit is designed for nonprofitorganizations that are considering starting a revenue-generating activity ora Business venture. The Toolkit begins with the assessment of an idea in thecontext of your organization, so to begin, you will need to have a few ideaspercolating. In addition, organizations that are currently operating abusiness might use the Toolkit as a guide for Developing a plan forexpansion or for revising their Business model. ivdeveloping a Social Purpose Business planintroductionDeveloping a Business PlanDeveloping a Business plan is an exciting, but challenging your Business and then writing the Business plan can takeanywhere from several months to over a year.

8 Staff time, organizationalresources, outside consultants or experts in the field are required for theprocess. In the end, the Business plan serves as both a communicationstool and a management tool to evaluate your performance and revise yourassumptions. It will justify the risks and explain the rewards associated withthe Business . A good Business plan will: Illustrate demand for your product Demonstrate stakeholders' interests and needs Confirm that the Business concept is viable Post healthy and realistic financial projections Demonstrate staff and management expertise Explain your ability to meet the proposed Social outcomesThe Case StudyThroughout the Toolkit , we use an organization that Seedco has workedclosely with for the past four years.

9 This organization, Recycle-A-Bicycle,is an established Social enterprise that has completed a Business plan forexpansion of the Business and programmatic activities. We will refer to theRecycle-A-Bicycle Business plan and pull examples to illustrate key full text of the plan is available in Section V. Using the ToolkitThroughout the Toolkit , you will find a number of icons, illustrated onthe following page, indicating special sections. In addition, a disk isprovided that contains the Financial Projections Workbook. This is anexcel file that is meant to help you build your financial projections. If youhave difficulty using the disk (PC-format), please go to download the files. You will need the user id and password id: toolkitPassword: businessIf you have comments, would like to purchase additional copies of theToolkit or are interested in learning more about Seedco or the NonprofitVenture Network, please email us at a Social Purpose Business planHelpful hints are provided to give you specific informationon a refer to templates, worksheets and examples whichoffer hands-on opportunities to put the concepts intopractice.

10 We encourage you to stop each time you see theAction symbol and pull out the corresponding worksheetfrom Part are actual or modified examples of socialpurpose are questions to help you develop the MarketOpportunity and Business Model Sections of your section will assist you in Developing your Logic Modelor Action Plan with regard to different sections of thebusiness a Social Purpose Business planintroductionAbout SeedcoFounded in 1986, Seedco provides financial and technical assistance, andmanagement support, for the community-building efforts of nonprofitorganizations and small businesses in targeted disadvantaged communitiesthroughout the United States. Working in partnership with localcommunity organizations, universities, and other local and nationalgroups, Seedco develops wide-ranging initiatives that support workingfamilies, promote community economic development, and strengthencommunity-based nonprofits.