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A step by step guide to developing and writing a business plan


Business & Strategic Planning A step by step guide to developing and writing a business plan What is a Business Plan? A business plan is A written statement ... – PowerPoint PPT presentation

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Title: A step by step guide to developing and writing a business plan

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

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 organisations ability to delivery the
  • It is a means of demonstrating that you know
    what you are doing and can be trusted with the
    money you are asking for.

Why do we need a Business Plan?
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
  • 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 its
    development and tasks are completed.

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 peoples
  • 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.

Who can we consult with?
Some examples
  • Staff
  • Volunteers
  • Local Schools
  • Centre Users
  • Local groups
  • Local Parish/Town Council
  • Local Churches
  • Childrens Centre
  • Local District/Borough Council
  • Local businesses
  • County Council
  • Health organisations, local PCT
  • Police
  • Sheltered accommodation
  • Housing associations

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

Step 1 What are our Mission, Vision and Values?
  • Mission and Vision statements are two different
    things although they are closely linked and may
  • A mission statement concisely describes the
    organisations 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

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. Its 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 organisations values, beliefs and
  • 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
    youll then have a Mission Statement!

sense of place
improve quality of life
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.

Some mission, values and vision examples
  • Community Action Hampshires Mission Statement
  • To strengthen and promote voluntary and
    community action
  • Community Action Hampshires Values
  • To remain an independent advocate for the
    voluntary and community sector in Hampshire
  • To conduct ourselves in an open and transparent
  • To be responsible to the needs and views of our
  • To value the diversity of the voluntary and
    community sector
  • Youthnets 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."

Step 2 Reviewing your organisations current
Review and evaluation areas for your
organisation to consider
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.
Youll 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 hasnt, 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
Reflection and Reviewing tools SWOT Analysis
  • The SWOT analysis looks at your organisations
    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

Strengths Weaknesses
Opportunities Threats
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
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.

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.

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?

What are your assumptions?
  • A business plan should outline clearly and
    define its 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.

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.

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.

Step 5 Identifying resources required the
organisations capacity to deliver
  • Before finalising the organisations priorities,
    areas of work and programmes of activity you wish
    to deliver within the business plans timeframe,
    it is vital you work out if you can realistically
    achieve them.
  • Youll 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?

Financial Resources
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 its
    financial policy and expected income and
    expenditure in an articulate and realistic manner
  • Made realistic predictions about the
    organisations 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

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 stream Current position Prediction of trend Action required

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

How much money will we need to meet our strategic
  • 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

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?

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?

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
  • You will also need to consider different reading
    audiences and ensure it is accessible to all
    people in the community.

Business Plan sections
1. Front Cover Organisation 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. Background The 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
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 its 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?
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. Implications Identified 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 years the business plan relates, main financial policies and evidence of effective financial management systems.
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.
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
  • If staff, volunteers and stakeholders have been
    engaged in the process from the beginning then
    the implementation of the plan will usually be
  • 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

Dont forget to consider- Monitoring Evaluating
  • It is important to explore how the business plan
    will be monitored and evaluated throughout its
  • 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 http//www.hants.go
Implementing the plan and monitoring performance
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.
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
Ensure the all resources are in place and
individuals supported to deliver tasks, projects
Use monitoring tools to measure the progress of
the plan this information can then be used to
work out how well you are doing.
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
  • Green Target/aim/objective etc has been
    completed successfully

Aim/target/ objective etc Status Information Required action

  • 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!!!

Useful links and resources
  • Main resource used to aid this bitesize training
  • Lawrie, A.,2007. The Complete guide to Business
    and Strategic planning for voluntary
    organisations. 3rd ed. London Directory of
    Social Change.
  • Business Link website link http//www.businesslink
  • Directory of Social Change Website link-
  • http//www.dsc.org.uk/Home
  • NCVO website link
  • http//www.ncvo-vol.org.uk/advice-support/funding-
  • Charities Evaluation Service Website link-
  • http//www.ces-vol.org.uk/index.cfm?pg474
  • Big Lottery Website link-
  • http//www.biglotteryfund.org.uk/prog_ypfnat_busin
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