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Business & Strategic Planning A step by step guide to developing and writing a business plan.

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1 Business & Strategic Planning A step by step guide to developing and writing a business plan

2 Business & Strategic Planning What is a Business Plan? A business plan is… A written statement describing your organisation, why it is needed, what organisational activities, services, facilities and programmes are proposed, how these will be managed, what outcomes and achievements will be made and how these will be financed; in particular it will show where the money will be sourced from and how and when it will be spent. It should also include information about your organisation, its aims, objectives, history and the organisation’s ability to delivery the work/activities. It is a means of demonstrating that you know what you are doing and can be trusted with the money you are asking for.

3 Business & Strategic Planning Why do we need a Business Plan? EXTERNAL REASONS INTERNAL REASONS

4 Business & Strategic Planning Before you get started Developing a business plan should be a dynamic and creative process, give those involved the opportunity to take a step back and reflect, review the progress made and develop a new sense of purpose and direction. When… It is important to consider the timing of developing your business plan- ensure the organisation undertakes the process at an appropriate time and schedules it into calendar- as they say if you fail to plan, you plan to fail! Effective Time Management and Support… Managing the time effectively and supporting individuals and tasks will help keep things on track during the process reducing the likelihood of things getting dragged out, people gain a real understanding of what is involved in it’s development and tasks are completed.

5 Business & Strategic Planning Before you get started Clarify consultation areas… It is also important to think about who should be involved in the process before you embark on developing a business plan for the organisation. You will need to work out what areas are open for consultation, those people both within and outside your organisation who could contribute and communicate the decision making processes clearly, which aids in managing people’s expectations. Who to consult with… Consulting with a wide range of staff, volunteers, groups and organisations, both internal and external to the organisation, can help with various aspects of the business plan including reviewing where you are now, ideas for future work and what factors may impact on the success of proposed ideas.

6 Business & Strategic Planning Who can we consult with? Staff Volunteers Local Schools Centre Users Local groups Local Parish/Town Council Local Churches Children’s Centre Local District/Borough Council Local businesses County Council Health organisations, local PCT Police Sheltered accommodation Housing associations Some examples…

7 Business & Strategic Planning Key Steps to devising your Business Plan… 1. Clarifying the vision and the values of the organisation 2. Review the organisation’s current position 3. Identify Ideas- explore assumptions, strategic opportunities and direction 4. Agree the strategic direction 5. Identifying the resources required and the organisation’s capacity to deliver 6. Produce the Business Plan Document 7. Implement the Business Plan

8 Business & Strategic Planning Step 1: What are our Mission, Vision and Values? Mission and Vision statements are two different things although they are closely linked and may overlap. A mission statement concisely describes the organisation’s key purpose and primary objectives- what the organisation is in operation to do. The unifying, localised statement should answer 3 questions from your communities (as your ‘customers’) perspective; - What you do - How you do it - Who you do it for

9 Business & Strategic Planning Tips on developing your Mission Statement 1. Begin with thinking about the role your organisation plays 2. Ensure you take time writing the Mission Statement. It’s a challenging but vital task- it needs to be both positive and inspirational! 3. On separate lists write down: What you do and how well you do it, the people involved in and participating with your organisation, your community- who are they, how you help people and your organisation’s values, beliefs and philosophy. 5. Pick out the most important points 6. Gain input from other people 7. Select your most important words and combine in one sentence or put your most important sentences together in one short paragraph – you’ll then have a Mission Statement!

10 Business & Strategic Planning Vision and Values Vision A vision statement is the long-term change the organisation would ideally like to see if its work is successful. It should set out your ideal destination- where your organisation wants to be. It should be challenging, innovative and forward- looking. The vision should be motivating and enable staff, volunteers and others to see how their effort contributes to an overall inspirational purpose. Values The beliefs of an organisation, the expression of what it represents and how it will conduct itself. Values are the heart of an organisation's being. Values underpin policies, objectives, procedures and strategies as they provide an anchor and a reference point for all things that take place.

11 Business & Strategic Planning Some mission, values and vision examples… Community Action Hampshire’s Mission Statement; “To strengthen and promote voluntary and community action” Community Action Hampshire’s Values; To remain an independent advocate for the voluntary and community sector in Hampshire To conduct ourselves in an open and transparent way To be responsible to the needs and views of our members To value the diversity of the voluntary and community sector Youthnet’s Vision statement; "Youthnet's vision is of an inclusive and equitable society that values children and young people and actively enables and celebrates their contribution to this."

12 Business & Strategic Planning Step 2: Reviewing your organisation’s current position Services, facilities & Project performance Financial performance Management & Governance capabilities Organisational structure Current & future Trends both internal & external Review and evaluation area’s for your organisation to consider

13 Business & Strategic Planning Where are we now? In order to develop a realistic and effective business plan that takes the organisation into the future it is important that a review of the organisation as it stands now is undertaken. You’ll need to consider where you are now, what you do and how you do it, how did you get to this point, what has gone well and what hasn’t, who do you serve? These are just some of the questions you will need to explore and answer. To help you analyse your organisation, recognise trends, identify what is happening both within and outside the organisation that impacts on the work that you do and get a true picture of where you are there are a number of reflection and reviewing tools you can use, you can use one or all of them, whatever suits your organisation… Reflection & Reviewing Tools

14 Business & Strategic Planning Reflection and Reviewing tools… SWOT Analysis The SWOT analysis looks at your organisation’s Strengths, Weaknesses, Opportunities and Threats. Think about what these are and record them down, perhaps in a table. By doing this you will be able to pull out what you do well and can build on, what needs to be improved and developed. It will also identify the opportunities the organisation may be able to capitalise on and identify obstacles and barriers that may get in the way of developing the opportunities. In turn this will aid you to identify what the organisation as a whole can do to overcome these challenges. StrengthsWeaknesses OpportunitiesThreats

15 Business & Strategic Planning PESTLE analysis A PESTLE analysis explores and identifies the external environment factors that surround your organisation which have an impact on the ‘business’ – what you do or want to do. Community Association Political Economical Social Technological Legal Environmental

16 Business & Strategic Planning 7S Model This tool is frequently adopted to assess and monitor changes within the organisations’ internal situation. The 7S model is based on the theory that, for an organisation to perform effectively, the 7 elements need to be aligned and mutually supporting. Use the model to review the organisation under each element to see if you can identify any elements that need to be realigned to improve performance.

17 Business & Strategic Planning Step 3: Identify Ideas- Explore assumptions, strategic opportunities & direction After reviewing and understanding your organisations current position, activities, services, structure, strengths, weaknesses, opportunities etc as well as your community needs and external impacts and trends it is now time to use this information and think about what, as an organisation, you would like to do in the future. Gain ideas from all stakeholders and explore… What areas of work will you continue to deliver and why? Explore why you deliver the work you do. Should you continue to deliver this work? Look into the areas of work that the organisation currently delivers which are important to the community, effective and are in line with your mission, values and vision for the future. You may then wish to prioritise areas of work in relation to those that are significant to achieving your aims, meet community need and are financially viable.

18 Business & Strategic Planning Identifying ideas and strategic choices … What new areas of work do you need to develop and move into and why? Ask and work out, based on your review and need information, what services, activities, events or programmes should the organisation establish and deliver. Again you may wish explore in depth why the organisation should move into the new areas of work and prioritise them in relation to achieving your agreed mission, vision and values, organisational capacity and financial viability. Other ideas can be identified by exploring… What partnerships, networks and forums do you need to participate in and why? What do you need to develop internally to improve your performance? What areas of work are you not going to deliver or move into and why?

19 Business & Strategic Planning What are your assumptions? A business plan should outline clearly and define it’s core assumptions as those stakeholders (including funders) reading it may wish to understand the assumptions upon which the rest of the plan is based. Assumptions need to be credible, openly discussed and frequently reviewed. The danger of delivering services, activities, programmes and events where an assumption no longer applies is common place. It may be helpful to identify elements that may challenge or conflict with the assumption and to test out how secure and concrete the assumption is. Examples of assumptions could include; The numbers of young people attending the youth club will stay the same over the next three years Local government grant to our organisation will decrease by 8% a year Other community centres and halls in the area will continue to charge a similar fee for their facilities as we do We will need to recruit more volunteers to help run our services and activities.

20 Business & Strategic Planning Step 4: Agree the strategic direction Having a clear strategic direction with which the trustees and staff are highly engaged is a critical factor in building a sustainably successful organisation. Strategic direction is about establishing your strategic goals/aims and methods you will use to achieve them. It implies a definition of intent, (what should the organisation achieve and why) as well as identification of the key means of achieving it, the main effort. Agreeing the strategic direction and aims involves constant referral to the mission statement, values and vision for the organisation. The process will encompass a continual movement between generating opportunities, forming priorities and working within the resources the organisation has and will have to utilise.

21 Business & Strategic Planning Setting your strategic direction… It is important to set strategic aims that: specify a clear direction; focus on intended outcomes; interlink with other aims; are realistic and achievable; In order to have a plan that is fluid, concise, well planned and has a clear direction it is important to restrict the number of strategic aims you devise (ideally no more than 6 or 7). Developing a future strategy usually involves making challenging decisions. You may have to decide to discontinue an area of work, reduce resources for a project or not develop a staff members proposal all of which will most likely cause conflict and anxiety. It is just as vital you consider the areas of work you will not be delivering as to those areas you will.

22 Business & Strategic Planning Step 5: Identifying resources required & the organisation’s capacity to deliver Before finalising the organisation’s priorities, areas of work and programmes of activity you wish to deliver within the business plan’s timeframe, it is vital you work out if you can realistically achieve them. You’ll need to ask yourself, explore and answer some questions including; Do we have the finances to deliver all of our intended work streams? How much will it cost to deliver our activities, projects, services etc? Do we have enough members of staff and volunteers to run and manage the work? What facilities and equipment will we need? Do we have the appropriate policies, procedures and systems in place?

23 Business & Strategic Planning Financial Resources

24 Business & Strategic Planning Financial information in a business plan? In an increasingly tough market place a voluntary organisation needs to demonstrate in a business plan that; It is financially viable has considered it’s financial policy and expected income and expenditure in an articulate and realistic manner Made realistic predictions about the organisation’s financial future Has calculated its services, activities and programmes costs using accurate figures and taken a full cost recovery approach with contingency plans attached Has consistent and reliable financial management policies and procedures

25 Business & Strategic Planning Financial position A good starting point is to look at reviewing your current financial position- Where do you gain income and what do you spend your money on? Is this likely to continue in future years? How much do we rely on particular income streams? Can we predict what financial trends will occur in the next 3,5 and 10 years time? What can we do to secure these income streams? Where else can we gain income? Income streamCurrent positionPrediction of trendAction required

26 Business & Strategic Planning Where could we gain income from? Grants from local authorities Sponsorship Contracts and service level agreements Grants from trusts, other funding bodies and companies Hire of facilities and resources Membership Income from sale of services/goods Management fees Legacies Fundraising Profit from trading arms

27 Business & Strategic Planning How much money will we need to meet our strategic objectives? It is important for voluntary organisations to ensure that when calculating the cost of services, activities and programmes that both direct and indirect costs are worked out for effective financial management. Direct costs: the costs only incurred as a direct result of delivering a particular service/activity for example staff, equipment, room hire. Indirect costs: the shared organisational costs for example management time, administration costs etc.

28 Business & Strategic Planning Other financial considerations… Develop a budget Create a cash flow forecast What % of the organisations turnover would be reasonable to use as a reserve or contingency? What financial policies and procedures do you have in place? – how effective is your charging policy? What type of charging strategy do you use? Who authorises payments? Who monitors financial activity of the project/service/ programme and organisation as a whole?

29 Business & Strategic Planning Staff and volunteer resources When developing services/activities and projects it is vital for the organisation to work out the staff and volunteer implications… who do we need to meet our goals and ensure we have the capacity to deliver them? What staffing structure do we need in place?

30 Business & Strategic Planning Step 6: Produce the Business Plan document When compiling the document itself it is important to consider the readers who will usually be those you are requesting support from. The style, layout and tone of the document will all make an impact on the reader and it would be wise to think about first impressions- some readers may only look at the front page or simply flick through the document briefly. It would be advisable to identify the key messages the organisation wishes to get across (no more than about 5), organise the plan around these, find someone outside of the organisation to review and feedback on a draft copy, use practical and active language to ensure the reader understands how you got to this point and how will achieve your goals. The use of charts and diagrams can be effective in illustrating information and avoid using abbreviations and jargon. You will also need to consider different reading audiences and ensure it is accessible to all people in the community.

31 Business & Strategic Planning Business Plan sections… 1. Front CoverOrganisation name and logo 2. An ‘executive summary’ An outline summary of the mission, values and context. It should emphasise the proposed strategic direction, main benefits and present a case for the organisation (no more than one page) 3. Introduction and mission Explanation of the kind of organisation you are and what you stand for, complete mission statement and organisational values and the outcomes you wish to achieve. 4. BackgroundThe origins and development of the organisation. What you have delivered and achieved, what area you cover, who are the beneficiaries, number of projects, staff, volunteers and your annual turnover figures

32 Business & Strategic Planning Business Plan sections continued… 5. A summary review A current overview of the organisation- emphasise the successes and strengths of the organisation and positive recognition that the organisation has received externally. Demonstration of a honest appraisal highlighting areas for development- SWOT is usually used to illustrate this information. 6. Future trends An overview of the organisations identified future external and internal environment trends that will impact on it’s strategic aims. 7. Strategic direction The explanation and demonstration of the direction of travel the organisation wishes to take- the assumptions that have underpinned the identified direction, what work will the organisation focus on, what are the main priorities and what will be changed?

33 Business & Strategic Planning Business Plan sections continued… 8. Strategic aims The medium term aims are listed in this section and an outline of the objectives that fall under each aim can be included. 9. ImplicationsIdentified legal, organisational and other implications of the work to be included in this section. Clarification made if services/activities are to be delivered differently or halted altogether 10. Financial information Clear explanation of how the strategic aims and objectives will be achieved financially and how these assumptions were made. Details should include income and expenditure forecasts for the year’s the business plan relates, main financial policies and evidence of effective financial management systems.

34 Business & Strategic Planning Business Plan sections continued… 11. Track record of the organisation This section gives the opportunity to present the case for the organisation to the reader highlighting successes- the strengths, experience, knowledge, capacity and positive reputation the organisation possesses. All of which will demonstrate the capacity of the organisation to effectively implement the business plan. 12. Immediate action A clear action plan which demonstrates the next steps within the short term time frame.

35 Business & Strategic Planning Step 7: Implementing the Plan It is important to consider how the business plan will be implemented across the organisation after it has been created. The plan should not sit on the shelf collecting dust- it is a active document that supporters, beneficiaries and other stakeholders will be interested in particularly if they have provided the organisation with funding. If staff, volunteers and stakeholders have been engaged in the process from the beginning then the implementation of the plan will usually be effective. As an organisation you should think about; How the plan will be communicated to those delivering it Clarifying the expectations How the plan and performance will be monitored and evaluated

36 Business & Strategic Planning Don’t forget to consider- Monitoring & Evaluating It is important to explore how the business plan will be monitored and evaluated throughout it’s life… How will you know if you have achieved your strategic aims and objectives? How are you going to measure success? What monitoring and evaluation tools can be used overall and within projects/activities and services? Who will be responsible for this? How will these be communicated to beneficiaries, funders and other stakeholders? See our E bitesize training on Effective Monitoring and Evaluating at:

37 Business & Strategic Planning Implementing the plan and monitoring performance 1.Defining goals 1.Ensurin g delivery 3. Monitoring progress 4. Evaluating results Ensure all those delivering the plan understand what they are doing, when & why clear expectations. Goals, objectives & targets can then be used to monitor progress. Ensure the all resources are in place and individuals supported to deliver tasks, projects & programmes. Use monitoring tools to measure the progress of the plan this information can then be used to work out how well you are doing. Using the monitoring information you can then measure the progress you have made and make any necessary changes. It is important to feed this back to stakeholders

38 Business & Strategic Planning Traffic light monitoring system An effective and easy method to use to monitor the progress of the plan is to adopt a traffic light system. Aims, objectives, goals and targets within the plan are listed against either; Red: No or minimal progress made Amber: Progress has been made although not complete Green: Target/aim/objective etc has been completed successfully Aim/target/ objective etc StatusInformationRequired action

39 Business & Strategic Planning Remember… It is important that all stakeholders are engaged throughout the process, understand what is expected so that contributions can be effective in meeting the needs based aims and objectives of the business plan. Reviewing, monitoring and evaluating is vital to success and feeding back helps keep people up to date and involved. Over to you and Good luck!!!

40 Business & Strategic Planning Useful links and resources Main resource used to aid this bitesize training course; Lawrie, A.,2007. The Complete guide to Business and Strategic planning for voluntary organisations. 3 rd ed. London: Directory of Social Change. Business Link website link RESOURCES RESOURCES Directory of Social Change Website link- NCVO website link – Charities Evaluation Service Website link- Big Lottery Website link-


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