Writing a business plan can help you stay focused on the core of your business. In a limited-resources company, you must focus on important deliverables and communicate effectively with your stakeholders, who include funders or investors, consumers, the community, the board, employees, and volunteers.

A social entrepreneur’s work is constantly a complicated mix of socio-emotional relationships and consideration of various environmental, cultural, and emotional variables that are always relevant, in addition to financial and marketing considerations. When the right strategy is implemented, the social and environmental effects are properly analyzed and estimated prior to the corporate strategy being implemented.

Working on a business plan undoubtedly requires a person to put in a lot of effort to identify the risks involved in addition to seeking funding and assessing viability. Thus, in order to get the backing they need from partners, investors, or the community at large, social entrepreneurs need to make sure their business plans are robust, knowledgeable, self-assured, and persuasive.

This post will concentrate on the final procedures required for creating a business plan with such success. Read each paragraph carefully and ensure that you apply the ideas correctly by calculating your goals, costs, and available resources.

What is a Social Enterprise Business Plan?

A comprehensive document outlining the social entrepreneurship venture is called a social business plan (SBP). It converts the BM into precise objectives, plans, schedules, tasks, and activities while measuring the project’s overall financial and economic ramifications as well as the social impacts and outcomes being sought. A SBP is made up of various important elements since it serves as the reference document for organizing and controlling all business-related activities.

What Makes a Social Enterprise Business Plan Necessary?

A business plan, first and foremost, aids in the management of your company and the making of wise decisions regarding its future course.

It will demonstrate how your company will grow and prosper.

It lists hazards and illustrates your plan of action for handling them. 

For whom is the social enterprise business plan meant for?

In addition to your stakeholders, bank managers, business advisors, contractors, and funding organizations, the main audience for the business plan is you. 

The crucial guidelines for creating effective business strategies

Executive summary

One of the most crucial sections of your company strategy, it should be brief and direct so that executives may rapidly grasp all the main points without needing to consult other sources. Making notes of the main arguments can help you to emphasize your main ideas. Begin by outlining the goals you set out to achieve, then discuss the outcomes and any recommendations you feel are important. Before the actual company plan is presented, it ought to be similar to an outline. After reading your executive summary, consider whether it accurately captures the essence of the information you want to deliver. It ought to function as a synthesis of your current resources.

Mission

Your goal needs to be attainable! Many entrepreneurs tend to write all the wonderful terms that don’t sound realistic in the first place, thus they overlook this important component. If you need help crafting this kind of language, get in touch with reputable business writing services like realworkce and describe your circumstances. Write a mission statement that highlights your accomplishments to date as well as the strategies you plan to employ on future projects.

Target audience

Writing a great business plan requires having a clear understanding of your target audience. There are two choices to think about. If your company plan pertains to a restricted geographic area or you work with disturbed adolescents, you might want to concentrate on pursuing a particular specialty. Making it obvious in your business plan that you are open to investment proposals and that you strive for worldwide cooperation is another way to target a global audience.

Problems and tender spots

You will undoubtedly encounter issues and difficulties when writing your company’s strategy. Reducing the scope and only addressing manageable aspects is crucial for success in this regard. In this manner, you’ll avoid bringing up a difficult task. Make a list of your resources and ask yourself what is essential. It is important to specify any additional circumstances, such as Covid-19 limits or logistics, carefully and in accordance with the law.

Analysis of the market and competitors

Your business plan needs to take market knowledge into account as well. Do your homework first and check out what your rivals are selling. Once you have this information and some statistics, include your results in your business plan and explain why you operate in a particular way and what sets you apart from the competition. For instance, if there is anything you can do differently, make sure to express it by outlining the current status of the industry and the reasons behind your chosen course of action for business marketing.

Goods and services

Remember to give some basic information about the goods or services you are providing. You can still list product specs in a different area or highlight services you provide, even if they aren’t required to be in your executive summary section. It should be concise and organized using bullet points when discussing accessibility considerations, special offers, and environmental and social factors. As required by national and international laws, make sure you offer product certifications and service license documents.

Financial plan

The business plan’s financial plan component needs to have historical financial reports, the current balance, projected results, and a risk assessment. For convenience’s sake, all reports should generally be mentioned and attached as appendix documents. While talking about your funding issues, provide financial details like interest rates and any potentially disputed bank data.

Marketing Plan

A marketing plan describes the strategy for promoting the good or service in order to bring in money for the social enterprise. This section discusses a variety of strategies, including public relations efforts, joint ventures with other businesses or groups, advertising campaigns, and financial allotments for every plan to precisely monitor development over time. Detailed details of the promotional items used to increase exposure and encourage conversions are also included in this. 

Structure of Organization and Plan for Capacity Building

Roles and responsibilities inside the organization are outlined by the organizational structure. Simultaneously, the capacity building strategy delineates tactics for attracting fresh personnel, educating current employees on novel proficiencies pertinent to their professions, and cultivating leadership attributes in those occupying pivotal responsibilities. Before being implemented, this part might need to be reviewed again by certified human resources specialists. This is because hiring procedures and employee benefit packages offered by individual companies are subject to varied restrictions in different locations and industries.

Operational Plan

Any social enterprise business plan must include an operational strategy since it describes the steps taken to accomplish the company’s objectives. This contains thorough explanations of the daily tasks, the resources needed, project schedules, and financial projections. Additionally, a risk management strategy is included in the operational plan to help mitigate any problems.

Plan for Risk Management

Every new endeavor has some risk, regardless of how well-thought-out a social enterprise business plan may be. This means that your overall business plan ought to include a risk management approach. This part describes the prospective risks of starting the business, how to reduce those risks when at all possible, what to do in the event that risks manifest, and what extra insurance policies to get in case repair is required.

Strategies of Differentiation and Competition

Social enterprises frequently face competition from other companies that are not committed to addressing social issues. Although it can be difficult, social entrepreneurs must set themselves apart in order to draw clients. This can be accomplished in a number of ways, including by highlighting the company’s social effect, focusing on a particular niche market, or providing distinctive goods or services. This section describes the competitors and provides an explanation of how the social enterprise might differentiate itself.

If entrepreneurs want their social enterprise endeavors to be successful in the long run, they must have a thorough business plan. While there isn’t a one-size-fits-all method for writing business plans, including five essential elements guarantees entrepreneurs have a strong platform to successfully launch their social enterprise. Social enterprises will not only survive but also prosper with smart planning.

Types of Social Enterprises

Although they are always changing and may fall into new categories when new sectors are developed, social enterprises are often divided into four primary groups. All varieties of social enterprises make an effort to function in a way that strikes a balance between generating profit and achieving their social goals, notwithstanding their unique distinctions.

1. Trading Enterprises

Cooperatives, collectives, and other worker- or employee-owned organizations are referred to as trading enterprises. Their size and organizational structure differ greatly, but compared to other types of businesses, their common ownership structure permits a greater level of economic resilience.

2. Financial Institutions

A few other financial institution types are also classified as social enterprises; they include membership-owned revolving loan funds, credit unions, and cooperative banks. For instance, credit unions are set up so that when a member deposits money as a consumer, they instantly become owners of the credit union, which then utilizes the money to support other members.

Credit unions prioritize serving their members’ needs over profits and provide lower interest rates and higher savings rates. Another type of institution is a cooperative bank. Like typical banks, it accepts deposits and lends money to its clients, but it runs on a cooperative model, which means that its clients own the bank.

Because many of them are sold on public stock exchanges, cooperative banks have come under fire for allegedly compromising their core values by occasionally providing non-members with access to their services. They also raise capital on open stock markets, creating the problem of a different class of shareholders vying for control of the bank against cooperative members.

3. Community Organizations

Community enterprises, community centers, housing cooperatives, community interest organizations, certain smaller stores, and sports clubs are examples of registered social enterprises that fall within the category of community organizations.

They are usually membership-based businesses with a specific mission that operate profitably with the intention of giving back to the community. The membership is frequently fairly sizable and supportive of the organization’s goals.

4. Charities and Non-Governmental Organizations (NGOs)

NGOs and charitable organizations function on both large and small sizes, typically being founded to further a particular political, social, or environmental objective. The company uses its income to support its humanitarian and environmental goals and to pay its employees who donate their time to help certain populations at no cost.

The best structures for a social enterprise

A social enterprise is defined by its nature, goals, use of revenues, and participation or engagement with stakeholders, rather than by its structure.  However, the structure chosen can have a considerable impact on the governance and flexibility of a social company in the long run, possibly affecting issues such as risk management, taxation, and access to capital.  Getting the structure right early on can assist to avoid problems and make the social enterprise’s growth and capacity to deliver on its social mission much smoother.

How should your social enterprise be structured?

Structures for social enterprises can be broadly classified into three types:

• Unincorporated associations

• Charitable structures

• Limited liability structures

• Unincorporated Businesses

Unincorporated associations, that are groups of people who got together without a formal legal framework, are typically managed by a committee chosen from among their members and have a constitution outlining their regulations.  A person or people may occasionally conduct business as a partnership or as a lone proprietor.  These organizations have some benefits, such as fewer bureaucratic red tape and less regulations, which are especially helpful for smaller businesses.  All such organizations, however, are not “limited liability”; rather, they are characterized by personal limitless culpability for their management in the event that something goes wrong.  Additionally, it may be challenging for these organizations to obtain grants or loan financing.

• Limited Liability Structures

For social enterprises wishing to implement a limited liability structure, there are various choices.  In addition to providing limited liability protection for participants, they offer a number of advantages over unincorporated organizations, such as the capacity to legally establish the social enterprise’s objectives through a binding charter. They do, nevertheless, also entail more regulation.

a) Companies Limited by Shares

A firm with share capital, wherein shares are issued to shareholders as their “share” of the business, has liability limited to each shareholder’s investment amount. The corporation may be able to obtain equity investment by issuing shares to its shareholders, including investors.

Directors oversee limited corporations and are accountable to the shareholders.  The shareholders will have certain rights and powers, but the directors will run the business on a daily basis.  The company’s articles of association and constitutional documents will specify these rights and authorities.  These outline the company’s procedures for running meetings, allocating earnings, and selecting and dismissing directors, among other things. 

When employing this structure, social companies typically include comprehensive “objects” clauses that outline their goals and methods of achieving them. In order to safeguard the company’s social goal, their constitutions could also contain other clauses that, for instance, restrict dividends to shareholders or mandate that a certain portion of earnings be reinvested in the organization.

b) Companies Limited by Guarantee

These are very similar to corporations limited by shares, but instead of having shareholders, they have “members” whose liability is restricted and who provide a modest guarantee to the company (often £1 or a tiny membership fee).

Because companies limited by guarantee do not have shares and are typically utilized by charities or not-for-profit organizations, they do not have a profit distribution mechanism built into them. Because of this, they may be helpful to someone wishing to manage a non-profit organization and get rid of the expectation of paying out dividends to shareholders. A company limited by guarantee may function as both a business and a charity. This may be advantageous and open the door to philanthropic funding, depending on the nature of the social goal.

It is necessary to create and register both businesses limited by shares and by guarantee with businesses House.  They are subject to stricter regulations than unincorporated associations and are required to provide information to Companies House, including accounts and the personal information of directors and other influential individuals.

c) CICs 

A corporation limited by shares or by guarantee may be formed as a CIC (Community Interest corporation).  It provides further safeguards for the company’s specific social goal, such as the requirement that a CIC fulfill a “community purpose” and have an asset lock that stops assets or profits from being given to shareholders or members.

CICs are a common form for social enterprises because they guarantee that the company’s assets and income are used for the benefit of the community they serve, while still allowing directors to be compensated and maintain control over the organization.

The regulations are similar to those of a limited corporation, with the additional necessity of submitting an annual community interest report to maintain the business’s status.  Incorporation entails more formalities, such as the prospective CIC declaring to Companies House its social goal. This is more demanding than what is needed for a “regular” business, but not as much as what is needed for a charity.

d) Societies for Cooperative and Community Benefits

Cooperatives (Co-ops) and community benefit societies (CBS), which are governed by and registered with the FCA, are organizations that provide equal management control and stakes to a wide range of members.  Whereas a CBS benefits the community, a Co-op benefits its members.

Redeemable (withdrawable) shares are another feature that allows CBSs to offer share capital of up to £100,000 to a single member. This feature can be helpful in obtaining low-cost financing from members without having to comply with all the legal restrictions of offering shares to the general public.

Examples of social enterprises that effectively use a Co-op or CBS form are those that manage a community asset, such as a local pub, or community energy installations. As of this writing, CBSs are tax-exempt charitable organizations.

e) The Limited Liability Partnership 

A limited liability partnership is known as an LLP.  Although they won’t be suitable for every social enterprise, they can be helpful in some situations, such as when two or more organizations want to collaborate.  The original parties’ identities can be preserved while the social goals of the parties are outlined and safeguarded by the LLP agreement.

• Charitable Structures

The Charities Commission oversees charitable structures, which are subject to stricter regulations and advantageous tax laws.

a) Charities

Charities come in a variety of forms and are registered with the Charities Commission. A charity must also register with Companies House if it is a limited corporation.  Compared to limited liability companies, charities are subject to higher levels of openness and governance, and any profits made must be reinvested in the organization.

Trustees oversee charities and are held to greater standards of conduct than company directors of limited corporations. Trustees have fiduciary duties to the charity. They must also act honorably, in the public interest, and to further the charitable goals of the organization.

This is advantageous to some organizations since it clarifies their mission and puts their goals front and center.  A charity, however, cannot operate “for profit” and is not eligible for equity financing.  Additionally, charities are only permitted to trade in order to further their main objectives, which may conflict with the goals of certain social enterprises that want to expand, evolve, and diversify.

b) CIOs

Similar in legal structure to a limited business, charitable incorporated organizations are subject to Charity Commission regulation.  CIOs are distinct legal entities with limited responsibility, but they are bound by the same regulations as charities.

A social enterprise’s structural decision may have long-term implications for the business. While the founders’ initial focus will understandably be on how the business may expand and best fulfill its social mission, investing time to think through the best possible structure and seeking legal counsel early on will help the business succeed in the long run.

We strongly encourage all would-be social entrepreneurs to schedule out time in your calendar for company development. It is a really useful tool for highlighting your business plan, evaluating the profitability and practicality of your endeavor, and identifying potential red flags and unstated presumptions.