A B U S I N E S S P L A N N I N G G U I D E TO D E V E LO P I N G A S O C I A L E N T E R P R I S E : P R E PA R AT I O N
“If there is one lesson to take away from this guide it is that strong financial management is critical to running successful enterprises including social enterprises.” Alistair Thornley, Enterprise Services Consultant, Scottish Enterprise
Based upon the information you have gathered, you should be able to answer some of the following questions. This should give you a clear idea of the extent of any change required. Are you clear about the financial risk that running a business might entail and are you ready for that risk? What is the view of your Board of Directors or Management Committee towards financial risk? What is the view of your key stakeholders towards financial risk?
Have you identified potential sources of investment funding, such as loans? If so, you should be sure at this point that your organisation will consider loan finance as a practical option. What changes might be required to your financial reporting systems in order for you to run a social enterprise?
You will be able to access advice and support on this process from banks, community development finance initiatives (CDFIs), social enterprise intermediaries and through mainstream business advice agencies. The Key Contacts list identifies a range of organisations that provide support. Remember that your networks are also likely to be a good source of advice and support. The success of your social enterprise will rest on you identifying the most appropriate funding or finance package to match your strategic objectives. It is advisable to invest a proportion of any profits into further business development, or in accruing reserves, rather than directing the entire amount towards the achievement of your social aims. This will provide a cushion for any unexpected drops in commercial income. One of the key criteria in assessing your investment readiness is that you ensure that your organisation has in place appropriate financial management systems and sufficient operational capability.
What can you add to the business plan? You should be clear about what resources you are going to invest in the business development process and how you are going to fund this development. This information can be used to complete most of the section entitled ‘the organisation’ within the business plan.
36
37