It’s important to have a clear plan on how you intend to run your organisation in order to sustain its operation in the future.
Your business plan will help clarify your project idea and define your long-term objectives. It provides a blueprint for running your organisation and a series of benchmarks to check your progress against. It is also vital for convincing your bank, your community and any potential investors to support you.
One of the key questions to answer is how you expect to generate an income, will it be from donations, grants, selling products and services? This is what we call the business model.
Choosing a business model
As a community organisation or charity, you may not even think of yourself as a business, but every community business has the same elements as a normal business - customers, products and services, finance, marketing and profit. The key difference is that any profit generated is for social and community benefit, not individual gain. However, you still need to generate profit (or 'surpluses') to return to the business or to spend for community benefit.
In order to write a convincing business plan, you need to understand and articulate your business model and make sure it is reflected throughout your plan.
What should be in a business plan?
We would expect to see the following in a business plan:
- About the organisation and/or people behind the business
- Mission / purpose of business and how you intend to achieve it
- Product / service, pricing and projected sales/outputs
- The market, the competition, the operating environment
- Risk analysis
- Resource needs and business operations
- Income and costs projections
- Funding and finance needs
- Cashflow forecast.
Tools to help create your business plan
A good way to start your business planning is by using Locality’s Balanced Scorecard to create an overview of your business plan on one page. The Balanced Scorecard is a simple business tool, designed to capture on one page various aspects of the organisation, setting out where the organisation is now and where it wants to be soon (e.g. two years time) and later (e.g. five years time).
There are many other types of planning tools you could use such as SWOT which looks at your strengths, weaknesses, opportunities and threats and PESTEL (political, economic, social, technological, environmental and legal).