Create a Solid Plan
The best place to start is with yourself and your partners. There are a whole host of skills needed to run a social enterprise. In looking at your own skills and those of your partners, you will be able to distinguish each other’s roles and also spot any gaps that need filling. You may need to recruit new partners or work with other companies that can help with those specific skills. Doing this helps you to determine what services you need to buy versus what you can complete within the organisation and from there you can begin to formulate an organisational structure.
Establishing a business model
Once you have worked out the organisational structure of your business, it is time to formulate a commercial plan. There are many models you could follow and we encourage you to do your own research to find a model that suits your business, but at Agency for Good, we highly rate The Lean Startup model. You can read about this in Eric Reis’ book. He discusses the need for continual innovation which we think suits social enterprises. They tend to have more moving parts and so tend to be more innovative than traditional businesses.
You can read about more business models here.
Business Model Canvases
Once you have researched potential models for your business, it’s a great idea to get your ideas down in some kind of tangible form. We recommend using a business model canvas like the one linked below.
These business model canvases help you map out your business. Filling in one box at a time you are able to clarify:
- Who your customers are, what they think, see, feel or do.
- What your value propositions are, why customers buy your product or use your service.
- What channels you will use to promote, sell or deliver your product and why.
- How you plan on interacting with your customers.
- Where your revenue streams are, how your business gains revenue from it’s value propositions.
You will find that after filling this out, you will have a much clearer picture of your business and how it will operate.
Planning Your Finances
The principal reason that any business fails is down to cash flow or to be more precise, lack of it.
When running a social enterprise, it is important to remember that you are in charge of 50% of your finances. That means that you need to have a good idea of how your finances will operate and how you will create enough income to keep the business going.
Try to get a prediction of your finances as early as possible. You can do this by building up a cash flow statement. List all your predicted sales along with any expenses for a minimum of one year. We advise that you do this over at least two years to be sure. We also advise that you overestimate your expenses and underestimate your sales, that way you have some flexibility throughout the year.
It’s also a good idea to take your personal finances into account. Work out your own personal cash flow. This way you can keep track of your own budget and avoid having to reenter full time employment.
A Note on Planning and Perfectionism:
As important as planning is, the plan doesn’t have to be absolutely perfect before the launch. It is better to start with something small and innovate and develop your ideas from there. Testing it small in the market reduces any risks and gives you an opportunity to get validation and feedback that will help your business in its next step.
Agency For Good are an ethical marketing agency.
We provide completely free marketing consultancy, coaching and training to 3rd sector organisations to help you focus and improve your income and in turn your social impact.
In 2019 we delivered 419 hours to 111 charities and social enterprise and we want to increase this to 500 hours this year so please get in touch.
We also provide high quality but subsidised web design, graphic design, video, social media, SEO, PR and copywriting services.