A Business Plan sets out your goals, the cost of meeting those goals, and the means of meeting those costs. It is an essential tool, both for fundraising and for basic survival!
The following outline gives a basic business plan "by numbers" which will help you to get started on the process. However, it is important to remember that it is a process - not a once-in-a-lifetime thing - and that a business plan should be examined at least annually, and revised in the light of experience.
You are invited to print out this page and use it as a tool to produce your own business plan.
1) Who are we?
The name of your organisation, and the essential core of
your purpose. No more than 50 words, and include all the key points
(main client group, geographical restrictions etc)
2) Where are you coming from?
If you are a new organisation, outline the reasons for your
existence, and how you came together. A more established organisation
should give a potted history, leading up to the present position. This
should give a logical lead-in to the next paragraph, by establishing your
legitimate interest in the subject.
3) What are we trying to achieve?
What is the main purpose of the organisation/project?
What is the need you are trying to meet, and how do you know about it?
You need to be thorough, but concise. Detailed statistics, research,
local information etc may be included in an appendix.
4) How will we go about it?
a) What do you wish to do to address the need identified in
§3?
b) Explain the methodology behind your approach – why will
your approach satisfy the need more effectively than existing provision?
c) What will you need – buildings, equipment, staff?
Again, seek the balance between complete and concise – job descriptions, architects
drawings, builders’ estimates, can all be included in appendices.
d) How will it be managed? How will you ensure that
users of your service are represented in the management and policy-making
structures of the organisation/project?
5) How much will it cost?
The full budget should appear as an appendix : here a brief
summary, with annual totals for key headings is all that is required.
ALL costs should be included, not forgetting the costs of fundraising.
The input of volunteers should also be noted.
6) How will we pay for it?
Where is the money coming from? If you expect this bid
to provide all the money you need (eg Lottery Funding, perhaps) you need
to make that clear : equally, if you anticipate a combination of Charitable
Trusts, Local and National Government funding, fee-based income and general
donations, this should be made clear. Once again, detailed budget forecasts
belong in the appendix, but summary figures should be included here.
7) How will we pay for it in future?
a) If this is a capital project, how will its future maintenance
and management be paid for?
b) If it is a revenue project (or a combination of the two)
how will it be sustained once the initial grants run out?
c) If fees or contract-based income are expected, you should
make clear the basis on which such expectations depend.
d) You should not be afraid of saying that you will fundraise
for a project’s running costs, but you should include the costs of fundraising
from Day 1 : you cannot start fundraising at the last minute to replace major
grant funding, and your funders will expect evidence of forward planning.
8) How will we manage it?
Issues of accountability and stewardship are crucial in the
voluntary sector.
a) You must show where the new project fits within your organisation,
and how the resources will be managed.
b) What are the checks and balances, both in terms of looking
after the money, and in terms of evaluating the service?
c) If you are a small organisation applying for funding for
a large project, include brief biographies of your management committee, showing
how their expertise will help you to handle the dramatic growth.
d) Make sure you have included the management staff and time
necessary to look after the project and its resources; budget for the
staff you need, rather than the staff you think “they” will let you have!
9) THE BUDGET
The last item in the plan, but arguably the most important!
a) Work carefully through your plans, and include all the
costs you might reasonably expect. For instance, capital projects are
nearly always over-budget, so include a contingency amount.
b) Include all the staff you will need, and budget for appropriate
salaries : check the local paper to see what other people are paying the
staff you wish to recruit. Consider linking to Local Authority pay
scales, or similar, so that you do not have to enter into individual contract
negotiations.
c) Don’t forget the time of management and admin staff in
looking after the new project. Budget an appropriate proportion of
their time AND OVERHEAD COSTS within your proposal.
d) Include amounts for training and for evaluation.
Both are essential, but are too often left as afterthoughts.
e) Income and Expenditure should both be included. At
the end of each year you should be breaking even. Show where the money
is coming from. If you anticipate a complex funding mix, summarise the
income from the fundraising budget and show the totals on the main budget.
f) Use a month-by-month cash-flow forecast to anticipate any
difficult periods in the year (Your income and expenditure may not synchronise
fully), and make plans to overcome such difficulties.
The process of compiling this business plan can be quite arduous. The temptation is then to send it to as many people as possible.
RESIST!
Read carefully what Trusts say about themselves in the Guides, and send them what they ask for. If in doubt, a letter of NO MORE THAN 2 sides of A4, well spaced, will suffice. You can always say, “We have a detailed business plan which we will be happy to send to you on request.”
The plan itself may need to be produced in a variety of formats : having completed this exercise, a Lottery Application Form will be much simpler, but do not send the plan separately unless your bid is over £200,000 (as specified on the form!)
Equally, for some Local Authority bids, more detail may be required in specific areas – showing how you meet the requirements in the Community Health Plan, for instance.
Listen to your funders. This is only one model of a business plan, not the gold standard. Be flexible in how you present your information, but not in your core objectives. If you have based your project on identified needs, do not be deflected by the demands of potential funders.