The business plan: three areas to cover and typical problems
Kai Hockerts, Professor, Copenhagen Business School
There are three areas that your business plan will have to cover:
1. How large is the market? How many beneficiaries are out there who you want to help with your social enterprise. How many of those can actually be reached, and how many of those are going to be reached by you?
2. Why you? Who is on the management team? What is your secret ingredient? You will have to address barriers to entry, competitive advantages, a long-term outlook, your path to profitability, when you expect to break even, your exit strategy.
3. An analysis of your competitors: Who are they? Non-profit organizations, charities or for-profit companies selling same services. How you differentiate yourself from these - different technologies & cost structures that allow you to be competitive in this market.
Three typical problems in the business plans:
1. The biggest issue is that one doesn't get it. The logic in the business plan is simply too difficult to follow. Be clear in your theory of change.
2. The second problem, particularly with social enterprises, is that the business part of it is not obvious. You might have a very clear social problem. But, what is your business model in addressing it?
3. The third part is, too much information. Don't give in to your urge to put everything that you have found into your business plan.
There are three areas that your business plan will have to cover:
1. How large is the market? How many beneficiaries are out there who you want to help with your social enterprise. How many of those can actually be reached, and how many of those are going to be reached by you?
2. Why you? Who is on the management team? What is your secret ingredient? You will have to address barriers to entry, competitive advantages, a long-term outlook, your path to profitability, when you expect to break even, your exit strategy.
3. An analysis of your competitors: Who are they? Non-profit organizations, charities or for-profit companies selling same services. How you differentiate yourself from these - different technologies & cost structures that allow you to be competitive in this market.
Three typical problems in the business plans:
1. The biggest issue is that one doesn't get it. The logic in the business plan is simply too difficult to follow. Be clear in your theory of change.
2. The second problem, particularly with social enterprises, is that the business part of it is not obvious. You might have a very clear social problem. But, what is your business model in addressing it?
3. The third part is, too much information. Don't give in to your urge to put everything that you have found into your business plan.
This blog post is based on my learnings from the course on ‘social entrepreneurship’ offered by Copenhagen Business School through Coursera (2014).
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