A strategic plan is essential to the success of any enterprise. Social enterprises, or those in which one pursues an opportunity to create positive social change, are no exception. The plan articulates the founder’s vision internally and externally with potential funders and customers and describes how the enterprise will fulfill that vision. Undertaking the planning exercise also forces the entrepreneur to think about the best way to handle every aspect of the business from cash flow to distribution, says Jeff Nock Iowa.
A vital component of a social enterprise strategic plan is articulating the vision. According to Jeff Nock Iowa, this section articulates how the world will look when the organization accomplishes what it is setting out to do:
- What is the problem?
- Why is it important?
- How significant is the problem?
- What are its root causes and contributing factors?
- Why is this problem solvable?
- What other approaches have been tried, and what were their results?
- What would the world look like if this problem were solved?
- What is the mission of this enterprise?
A good mission statement is succinct and memorable and describes the purpose of the organization. One social enterprise, Bombas, a sock company, has developed the mission statement to provide a sustainable solution to the most requested clothing item at homeless shelters—socks. After developing the mission, the entrepreneur describes how the enterprise will fulfill the mission, for example, what factors will affect change and how the new business will act to do that, says Jeff Nock Iowa. In the Bombas example, Bombas donates one pair of socks to a homeless person for every sock sold.
After the plan articulates the vision and mission, it covers the external market conditions including competition, the organization’s marketing/sales, operations, leadership team and financials that will enable it to carry out its mission, says Jeff Nock Iowa. Examples of these assets are experienced leadership, specialized skills, and partnerships. Just as with any business, a social enterprise will talk about how its operations or product or service differs from competitors. It will discuss how its approach to solving the social problem is unique and differentiated, as well, says Jeff Nock Iowa.
The last section covers finances. It outlines how much funding is needed to start the venture, what the entrepreneur already has, and if gaps exist, how they will be filled. It includes sales projections, costs, and provides cash flow and income statements for three to five years. It also includes an analysis of funds that might be available for the social cause and whether the enterprise can access that money. Cash flow is essential because, without it, a social enterprise will be unable to affect sustainable change, says Jeff Nock Iowa.
For a social enterprise, profit is not the only success factor. The plan also provides a section on how the enterprise will measure success. The metrics used to measure success should link back to the mission statement and be clearly assigned to specific leaders, says Jeff Nock Iowa.
Each section deals with risks — what could go wrong financially, strategically, and programmatically — and how the enterprise will mitigate these risks. A section also describes how the business will scale, including how it will balance the speed of scaling while also optimizing social value creation, says Jeff Nock Iowa.
Jeff Nock Iowa is CEO and founder of Prescient Consulting LLC, which helps funded early-stage and mid-cap companies achieve their vision and growth goals. Jeff Nock Iowa is an experienced executive, consultant, and leader with a demonstrated history of growing startups, non-profits, and established companies.