Business Planning

Any organisation, whether it’s a small voluntary organisation, a social enterprise or a charity, needs to have a business plan. We’re sure you’ve heard the term ‘to fail to plan is to plan to fail’. The business plan doesn’t need to be a complex wordy document, but does need to clearly show:

  • Where you, as an organisation, are now
  • Where you, as an organisation, want to be in a set period of time e.g. 3 years
  • How you, as an organisation, are going to get from where you are now to where you plan to be in three years time.

A business plan should be used as a tool and is a ‘living document’ you’ll need to review your business plan regularly to see if you are meeting your targets.

This section we will help you create or review your business plan, even if it’s the first time you have created one.

Is everyone on board?

First and foremost is to ensure that everyone in the organisation is involved in the planning process as they need to ‘own’ the business plan. It’s a good idea to schedule time at least once a year where all your stakeholders consider the business plan.

Quite often organisations will have a business planning day which is both a team-building day, but also an ideas day, where the thinking is done and ideas are developed. If you can afford it, it is sometimes sensible to find a qualified business adviser to help facilitate and plan the day. However, we have provided some ideas and resources below to help you with your business plan.

You can either work through the information below or download the following useful resources to help with your business planning later.

Vision Mission Objectives and Activities

Vision – the vision for the organisation is important, this describes what you aim to change, how you see the world for your community or service users if you achieved what you aim to achieve.

Mission – this simply describes your business mission, what its purpose is, how it is going to contribute to achieving the vision. Most organisations create a mission statement to encapsulate what they are trying to achieve.

Objectives – Your objectives are what you aim to achieve, for example ‘to establish a social enterprise hub’. You will likely have other objectives within a business planning period too. Most organisations will identify five to seven key strategic objectives.

Activities – Your activities are all the things you are going to do to meet your objectives, for example, some activities to meet the objective above might be:

  • Provide social enterprise training courses
  • Publish a regular newsletter
  • Build a website with social enterprise resources etc.

Sometimes staff and trustees [directors] have a different understanding or ideas about what the organisation’s mission/ vision is. A simple way to start to ensure that it’s a single agreed mission/ vision for your organisation is to have a quick exercise with post-it notes.

Each person writes what they consider the mission/vision to be without telling anyone else. The post it notes are then put together on a single sheet and compared, most will have similar things, but some will differ. Quickly debate and agree what’s kept and what’s dropped.

Here’s a short example of how mission, objectives and activities fit together.

Mission Objectives Activities
To ensure all children and young  people have access to high quality sports facilities in Chelmsley Wood [some   organisations like Community Development Trusts, may have an area of interest which is narrow like this one, others will be much broader] To create a multi-purpose sports facility in every neighbourhood within the Chelmsley Wood catchment area. To raise funds to buy land
To develop partnerships with other sports providers / schools and youth centres
To increase participation levels in sporting activity Create a football league in local neighbourhood
To run an inter-neighbourhood football tournament each year
To hold a community sports event each year
To raise awareness of the benefits of sport
Develop a bursary scheme
Values: organisation will also consider their values and agree these e.g. Young people led, open and transparent, provide value services, inclusive and equal etc.

Picture It

We’ve all heard the phrase ‘a picture paints a thousand words’. A picture can also help when you’re trying to develop your business plan. Spend 10 minutes drawing a picture of where your organisation is now.

This really helps!

The picture should represent the internal and external factors affecting your organisation.

For example: your picture might be, a leaky boat struggling to get across the river. You may have recently lost a key member of staff so there’s no captain steering the boat, or the delivery staff may not be performing well therefore the prop is broken or no one’s fuelling the boilers. The financial and political environment may be represented by a wind thrashing you from side to side

Considering this picture format will help you identify the good things about your organisation [strengths] and the weak areas that need to be strengthened [in a fun and creative way]. The picture will help explain the business to others too.

Once you’re happy you have a good pictorial representation of your business it’s time to draw a picture that represents the business in the business plan cycle [in our example 3 years].

It may well now look like an ocean liner powering across the sea with everyone in uniform working like a well-oiled machine. You now know – where the business is now and where you want to get to, with each part of the picture representing an element that needs to be developed or exploited.

SWOT it out

The SWOT analysis is a commonly used business planning tool; if you’re new to it don’t worry. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are generally internal issues, whilst opportunities and threats are generally external factors.

Spend half an hour with your team considering the SWOT. This is a time to be honest with yourselves. Be sure you list all that you can think of, but avoid blame. Quite often you’ll find that it is easier to identify weaknesses than strengths, but do ensure you consider your strengths thoroughly.

When undertaking a SWOT analysis try to think about all levels within the organisation including whether the Board of Directors [Trustees] have any skill gaps or you’re missing something specific on your directors group. See also the governance section of this toolkit to get further guidance and templates here. See also Succession Planning here.

Remember that threats can often be turned into opportunities, for example, if an identified threat is a local competitor, an action might be to consider whether there are partnership opportunities for both organisations which may strengthen both.

PESTLE Analysis

PESTLE stands for Political, Economic, Socio-cultural, Technological, Legal and Environmental analysis and is a useful tool for understanding the ‘big picture’ of the environment in which an organisation is operating. Specifically, a PESTLE analysis is a useful tool for understanding risks and making strategic decisions about how and where to invest your energy and resources.

Template for SWOT and PESTLE Analysis

Stakeholder Analysis

Stakeholders are anyone who is either:

  • Affected by the business or
  • Can affect the business

It is worth creating a stakeholder map and considering who key stakeholders are. Key stakeholders are those that have more influence on the business, for example, services users, staff and funders will be key stakeholders. Find out more about Stakeholder Analysis.

The above exercises will help you identify what needs to go into your business plan. The business plan will also contain legal information, e.g. the structure of the organisation, where it operates from, how it’s governed and managed the staff etc.

Finances are an integral part of the business plan. You will need a cash-flow forecast and an income and expenditure profile for the time of the plan. You may also need a profit and loss statement.

The market, marketing and communications is also an important part of your business plan.

There is a comprehensive guide to the structure of the business plan. This guide gives a narrative of what needs to be in each section of your plan. Not every business will be able or need to fill out every section so you should adapt this to your own requirements.