Transcript Business planning training for social enterprise start-ups

Business planning training for
social enterprise start-ups
The Graduate Certificate in Social
Enterprise
Clifford Conway
Introduction




Funded by BHCC (2004)
Partnered with BHBCP
Two cohorts 2005/6 21 students
Entry requirement




Normally NVQ3 + 2 years relevant work experience
Teaching staff selected had some knowledge of
the community & Voluntary Sector.
Guest speakers
The challenge: Avoid producing a generic
programme
2
Course content






Literature review
Other courses (NVQ/OCN)
BHBCP
Tutor expertise
Local social enterprises
University validation
3
The Business Planning Literature

The typical social enterprise employs 10
people.




49% employ fewer than 10 people
38% employ between 10 and 49
11% have 50-249 employees and
2% employ more than 250
(IFF, 2005).
4
The Small Firms Literature

Variable usage of business planning



83% Naffziger & Kuratko (1991)
40% Georgellis & Joyce (2000)
‘All decisions revolve around the entrepreneur with little
reliance on formal planning…decisions can be swift,
opportunistic, instinctive and bold and are rarely
committed to paper’.
5
Use of Planning Tools

At an ‘intuitive level’ only



Stonehouse & Pemberton (2002)
Only 10% had heard of a PEST
Only 20% had heard of a SWOT

Georgellis & Joyce (2000)
6
Why write a Business Plan

Key reason:

To attract investment or debt funding
(Hodgetts and Kuratko, 2001; Tapinos et al.,
2005; Burns, 2007)
7
Barriers to planning




Lack of time
Lack of marketing expertise
Lack of financial skills
Not considered relevant

Kirby (2003)
8
Social Enterprise Planning

Findings very similar to the
commercial sector:




Smallbone et al (2001)
Bull & Compton (2006)
Bull (2007)
Chapman (2007)
9
Is Social Enterprise Planning Different?




Social enterprises may be 80-90% similar
10-20% that is different is often the make or
break factor.
They have to meet both a financial and a social
bottom line which can cause tensions and
conflicts many mainstream businesses do not
have to face…
The real difference is often found in the
organisational culture
(DTI, 2002).
10
Is Social Enterprise Planning Different?

Pearce, (2003, p.9):



Social enterprises are not businesses; they are social
enterprises.
They require social enterprise plans, not business
plans.
They require support and financing mechanisms which
reflect their values.
11
Is Social Enterprise Planning Different?


a social enterprise plan must ‘not only demonstrate that its
commercial plan is viable and achievable but also that its
social aims are compatible with the business plan and also
achievable.
A social enterprise plan will have social performance targets
as well as business performance targets.’
Pearce, (2003)
12
Benefits of Business Planning




Clarity of direction
Knowledge of the market place
Strong commitment from
stakeholders
Attract investment
Dees et al (2001)
13
Distinctive features of social
enterprise business plans





The Social Enterprise Value System
Financial Management
Human Resource Management
Legal Issues
Marketing
14
The Social Enterprise Value System



Mission context
Democratic and inclusive decision
making
Wide range of stakeholders
15
Financial Management



Sources of funding
Social auditing
Social costs
16
Raising funds?





‘…where will that first cash injection come from when
the business is a social enterprise and there are no
personal savings and no property to offer as collateral?
Or if it is a social enterprise entering a new market?
Or doing the sort of business the commercial sector
isn't interested in because the margins are too small or
too risky?
Or with a client base or location or staff that's just too
difficult?
Or because the business model is based on the foolish
notion of offering goods or services to people who may
have problems paying at all, let alone sufficiently over
cost to allow for an attractive return on capital?’
(Phillips, 2006)
17
Human Resource Management



Managing volunteers, part time
staff, clients
Appointment of directors and
trustees
Managing cultural tension
18
Legal Issues


Legal structures
Ad hoc legal issues
19
Marketing



Marketing the ‘mission’
Marketing and Vulnerable clients
Networking and cooperation
20
Q&A
21