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Welcome to Workshop 4 of the Levitt Social Challenge!

Welcome to Workshop 4 of the Levitt Social Challenge!. Developing a Dynamic Business Plan. Building a Dynamic Social Venture Business Plan. David Renz, Director Midwest Center for Nonprofit Leadership Henry W. Bloch School of Management University of Missouri – Kansas City.

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Welcome to Workshop 4 of the Levitt Social Challenge!

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  1. Welcome to Workshop 4 of the Levitt Social Challenge! Developing a Dynamic Business Plan

  2. Building a Dynamic Social Venture Business Plan David Renz, Director Midwest Center for Nonprofit Leadership Henry W. Bloch School of Management University of Missouri – Kansas City

  3. Key Elements of a Business Plan • Executive Summary • Description of the Venture • Organization and Management Description • Market Opportunity Explanation • Product or Service to be Delivered • Basis for Assessing Quality and Satisfaction • Key Planning Assumptions • Uncertainties and Potential risks • Financial Projections • Growth and Exit Strategies Midwest Center for Nonprofit Leadership at UMKC

  4. Executive Summary This is the first part of the business plan document, but the last part to be created.

  5. What is the Start-Up Venture? • What is the product or service? • Who is the target market? (Clients and funders) • Is the venture a start-up, expansion, or acquisition? • Where and how is the product or service delivered? • What is the nature of the venture, and how will it operate? • Who is on the board, and who is on the management team, and what are their qualifications for leading and enabling the venture to be successful? (More on this later) • What are the unique characteristics indicating success?

  6. Organization & Management • What is the relevant background of key management? • Who are key employees and what is their relevant experience? • What is their educational background? • Why will they make the venture a success? • What are the responsibilities of each member of the management team? • Who performs the planning function? • Who reports to whom? • Where are the final decisions made? • Who is on the board of directors or advisory committee and how is their experience and knowledge helpful? • What is the overall organizational structure? • What outside professional services are required, and who will provide them? • How will management be compensated?

  7. Organization & Management • Personnel • How many and what types of staff will the venture require in each of year 1, year 2, year 3? • What functions will each perform? • What skills must each have? (Licenses?) • Are the positions full- or part-time? • Is training required? • How will personnel be compensated (hourly, wages, salaried, overtime, benefits)? • Is there sufficient supply of skilled staff available in the marketplace?

  8. Market and Marketing Approach • Who is the target market? • Who is the typical client or consumer (age, gender, profession, income, needs, characteristics)? • Who is the typical funder and what are their characteristics? • What is the present size of the market? • What percent of the market will the venture have? • How will the venture expand its market? • What is the market’s growth potential? • What geographical area will the business serve? • Who is the competition? What are their strengths and weaknesses? How are they different from your venture?

  9. Markets and Market Planning (2) • What is the venture’s competitive edge? • How will the venture advertise and promote its product and service? • How will the venture distribute its product or provide its service? • Are there any warranties or service policies? • What is the venture’s pricing strategy? • Will the venture sell wholesale or retail? How will it reach the market? • Does seasonality affect the venture? • How will the venture handle the public relations function? • Will the venture conduct ongoing research and development?

  10. Product(s) and/or Service(s) • What is the process required to produce items for sale, or to provide the service? • Which aspects of this process will the venture undertake, and which will be provided by others? Who will provide them? Are there key collaborators? • What are the requirements for fixtures, furniture, machinery or other equipment? • Will seasonality affect production/service delivery? • What is the floor plan and structural features of the facility? • How will the venture purchase inventory/supplies? • How will the venture administer quality and cost controls? • How will the venture benefit from the experience of the nonprofit organization?

  11. Basis for Assessing Quality and Satisfaction • What is the process for gathering data about client performance, success and satisfaction? • What is the process for gathering data about overall program performance and impact? • What are the performance metrics that you will need to monitor. • Are there external entities to which the venture will need to report performance(e.g., accreditors, license holders, regulators)? If so, who are they, what will they require, and how often?

  12. Risks, Uncertainties and Key Planning Assumptions • What are the key planning assumptions that have been made as a part of developing this venture plan? • What are the risks that are inherent in the development and operation of the venture, and what are the ways that these risks will be managed? • What are the uncertainties that exist with regard to the venture, and what do you know about them?

  13. Financial Projections • Budget • Cash Flow (Pro Forma) • Projected Revenues • Amount and Timing • Projected Disbursements (Expenses) • Income Statement • Balance Sheet

  14. Growth (and Exit?) Strategies • What are your plans for long-term growth and development? • When and in what ways do you expect to take this venture to scale, and what are relevant timing issues? • (Example: deeper, broader) • Is there an exit strategy? • Is there a succession strategy?

  15. Appendices • • Market data – statistics • • List of product/service offerings • • Floor plan indicating requirements for space • • Capital-equipment list • • Quotes and estimates from vendors • • Rent, lease, or purchase agreements • • Letters indicating a line of credit or loan • • Letters of intent from potential customers • • Letters of support from others in the industry, or from foundations and corporate giving offices • • Legal documents, such as incorporation papers or nonprofit status determination letter • • Annual report and financial statement of the nonprofit parent

  16. Now write the Executive Summary • • What is the product or service? • • What is the market (clients and funders)? • • How will this product or service be delivered? • • Who is the management team? • • How many employees will the venture have? • • Where is the venture located? • • How will the venture operate? • • Is the venture part of a larger nonprofit organization? • • What are the revenue projections for the first three years? • • What is your profit estimate for the first three years? • • When will the venture break even? • • How much money do you need, and why? • • How will the money be repaid?

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