Business Planning - How to put the 'Business' into Planning

"Business Planning" appears to be a straightforward phrase. It suggests you should do some planning if you want to do something to build up your business. Sounds easy?

Many charities think that developing a plan means thinking up ideas on how to help further a cause. Once the ideas have been documented, throw in some objectives and milestones and things should roll on nicely. The well intentioned document then follows the Dilbert Principle which states: "There are two major steps to building a Business Plan, 1) gather information 2) ignore it."

Harsh maybe, but this is often the case across many types of organisations, not only charities. If you are going to spend time and money investing in a Business Plan, make sure you understand why you are doing it. Is it because funders are asking for it or regulations are tightening up? This may be the case, but there are underlying reasons why this is so.

A well thought through Business Plan will provide you with guidance on how to move your charity towards meeting its aims and objectives. It will create an understanding about the people that you may influence , or may want to influence, as services and activities develop throughout the lifetime of the charity. This in turn will shape how you reach this audience and what you will do once you get there. Funders and other interested parties are aware of this and want to ensure that those driving the charity have laid down ground rules and taken time to consider the implications of what they want to do.

There are of course, the dreaded 'financials' but this is something that falls out of the plan. You need to know how much money it is going to take to reach your goals and what other resources you are going to have to gather and develop, be it people, systems or infrastructure.

In gathering information for your Business Plan you should identify who else is doing what you want to do, and if this will create problems for your organisation, or whether it will provide you with opportunities for sharing resources and knowledge.

Once you have gathered information on what you are currently doing, who you need to reach, what strengths you can capitalise on, and where you want to go, you can then develop strategies to get there.

Many options will present themselves and the more the merrier! Get everyone involved to ensure that the end game plan will be adopted by each person in the organisation. Once you have decided on which ones to pursue (and you have to make sure the selection is achievable), the funding requirements can be pulled together and tasks and targets developed.

Once the Business Plan is developed, make sure that it is used as a working document. This doesn't mean taking it out of the cupboard now and then, dusting it down and glowing proudly at board meetings. It means using it to prepare funding applications, drive policy change and develop objectives and development plans for employees. Updates should be made whenever things change or if objectives are met. It is, after all, simply a plan, which is only absolute at the point in time of writing.

Lastly, remember that it was written for a reason and when the time comes, and strategies work and objectives are achieved, celebrate and give yourself a well deserved pat on the back.

Business Plan Outline

Section 1   Introduction & Vision

The introduction provides the opportunity to outline the main reason for building the plan, whether this is to focus on the development of the strategy of the charity, such as becoming more sustainable, or to create new forms of funding streams. The vision should be stated clearly and will both engage and inform the reader. If you do not have one, this is an ideal opportunity to get everyone engaged together to define the charity's vision.

Section 2   Profile

The next section should go into detail about the background of the charity and the core services and other activities that are carried out. Provide examples of successes or references and quotes to show that you understand the impact of what you do and that it is worthwhile and beneficial to those the charity supports. Another tip is to put in key achievements focusing on best practice developments and things that have had the biggest impact on both the charity and the environment it operates in.

Section 3    The Market Place & Competition

It is important to show that you understand the environment or market in which you operate. If you do, you have more chance of successfully achieving the aims and objectives of the charity. If you do not, it may be difficult to develop as you may be competing for funding and someone else may be doing the same thing but with a stronger focus.

Key areas to review are the geographical area the charity works or is hoping to work in, the characteristics of people that you may want to reach (income, culture, age, etc.), and what their needs are.

In addition, identify any other charities or service providers in this area and what they can offer that you cannot (or do not). This will help you identify alliances that you can look into as well as identifying risks such as duplication services which will raise the question you need to change what you offer.

Section 4    Influencing Factors, Opportunities & Risks

One of the key areas of any business plan is the identification of factors that will influence you going forward. Research into things that impact the charity from outside of the operation such as legislation, funding restructures, or changes in society (for example, more people staying in the community which results in an older age group of service users).

As well as looking at outside factors, look at what happens within the charity. What are the strengths and weaknesses? Look at your procedures, staff skills, culture, current users and beneficiaries, management, range of services, technical systems and of course, finances. Can you turn any one of the weaknesses into opportunities? What are the threats to the charity? One of the main outputs to this exercise is the ability to identify what you excel at. This is your core competence which should be used as a focus in any development plan.

Section 5    Strategies

After all of this work, the strategies should come easily! This is the time to use your team and get ideas on what you can do. Use the information gathered in the first few sections and your core skills to provide services which will reach as many people as you can with as much support and benefit as possible.

Pick a few areas that you want to focus on such as educational activities, membership growth and infrastructure and staff development. From here and for each area, work out what the objective is. Once defined, think of strategies on how to achieve this objective. For example, an objective may be "To develop a staff development programme by 2013 in order to fulfil the charitable aims and objectives, to motivate and to ensure staff retention." One strategy to achieve this objective may be to develop objectives and feedback plans for each staff member.

Once you have identified strategies (which you think are achievable!), look at tactics to support the strategies. From the above example, one tactic may be to engage a consultant to help develop the plans.

The last area that should be defined within the plan is outputs. These are what you are looking for once the strategies are put into action. An output from the example above would be 'Performance Management Objectives' for each staff member. It is important that each objective is measurable to ensure you achieve it.

Section 6    Board of Directors and Management

Information about the main players is critical at this stage as this provides information on the skills and experience of the people that will be helping to implement and manage the business plan. Place emphasis on skills that tie back into the charity or the part of the sector that you are in.

Section 7    Financial Information & Requirements

Last but no means least come the numbers. Once you have identified the things you want to focus on you should develop a fully costed plan of how to get them up and running. You should remember and include an overview of the charity's accounts including any budgets you have for future years. The budget should include any changes or new activities that you have identified in your Business Plan as well as such things as staff costs (including training), property costs, (rent, rates, insurance, etc.); administration costs, project costs, management costs and capital costs (new computers, furniture, buildings, etc).

Section 8    Appendices

If there is anything you feel is important to back up your plan, put it into an appendix. Things to include could be detailed objective plans for the strategies outlined in Section 5, case studies providing examples of successful projects and detailed organisational charts.

Finally, put your Business Plan together in a well presented document, and run it past one or two key colleagues, before launching to the Trustees and the organisation itself - with a bit of a fanfare to ensure it catches everyone's interest.

One final word. Look at and reference your Business Plan often - it's there to work for you and keep you on track. Next year's plan will be so much easier!

Mark Freeman CA (Canada)