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Social Enterprise Business Plan

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A social enterprise is an activity of a nonprofit that employs entrepreneurial, market-driven strategies for earned income in support of its mission. This outline for a social enterprise business plan is a guide for research, planning, and writing a business plan for nonprofit social enterprises.

A social enterprise is an activity of a nonprofit that employs entrepreneurial, market-driven strategies for earned income in support of their mission. Business plans are a common tool for entrepreneurs when starting or growing a business enterprise. For nonprofits that are starting or growing a social enterprise as a part of their program activities, developing a business plan is an essential step. While social enterprise business plans address all of the questions needed for any business, nonprofits also need to consider the alignment with mission, organizational background and structure, and evaluation of both financial and social impact.

This outline for a business plan is a guide for research, planning, and writing a business plan for nonprofit social enterprises. The sections below are provided as a roadmap for the plan. Most business plans include each of these sections, though the length and amount of detail will vary depending on the nature of the enterprise, the complexity of the organization, and the purpose and audience for the plan.

Executive Summary

The Executive Summary provides the most important information for readers that need to understand and support the concept but not necessarily know the detailed plans. This is usually written last.

• Organizational description
• Business concept
• Market description
• Value proposition, or competitive advantage
• Key success factors
• Financial highlights and capital requirements

A social enterprise of a nonprofit organization may contribute directly to achieving mission; may be complementary or supportive of mission; or may be unrelated to mission (with primarily financial goals). The alignment to mission is a critical question.

• Organization mission and/or vision statement
• Relationship of social enterprise to organizational mission, or separate mission for the enterprise

Background and Structure

This section summarizes the organization’s history and programs and how the enterprise will fit in to the larger organization.

Most social enterprises operate as an activity or program within the nonprofit, though some are legally structured as a separate nonprofit, a for-profit subsidiary, or an independent organization.

Form should follow function and the legal structure should support the purpose and activities of the enterprise. Advice from an expert attorney may be needed.

• Brief description of the nonprofit, including context and programs
• How the business venture will be structured in the organization
• Legal structure and governance (Boards, advisory committees, reporting)

Market Analysis

The market analysis is the heart of the business plan and is too often inadequately explored when planning a social enterprise. Solid research is necessary to understand the target customers and how the enterprise will meet a gap and demand in the market. No amount of mission or commitment will overcome a deficiency in market knowledge and a bona fide demand for the product or service.

• Summary of current market situation
• Target market and customers
• Customer characteristics, unmet demands and buying factors

Competitive Analysis

This section describes the competitors, both nonprofit and for-profit, and the value proposition, or market advantage, of the proposed business.

• Primary competitors
• Competitive products/services
• Risks and opportunities in competitive market
• Recent or emerging changes in the industry
• Specific description of competitive advantage/value of proposed product or service

Products/Services

This section is a summary of the product or service that will meet the demand in the market. It does not need to include detailed descriptions, price lists or other materials.

• Product/service description
• Positioning of products/services
• Future products/services

Marketing and Sales

This section will describe how the organization will reach the target market and turn those prospects into paying customer.

• Marketing strategy
• Sales tactics
• Advertising, public relation, and promotions
• Summary of sales forecasts

This is the “how to” section, describing the creation and delivery of the business’ product or service.

• Management structure
• Staffing plan and key personnel – if this includes programmatic elements related to the mission, expand this section
• Production plan or service delivery, including summary of costs of materials and production
• Customer service/support strategy and plan
• Facilities required, including specialized equipment or improvements. If the business is retail, discuss location characteristics

Evaluation and Assessment

Most for-profit businesses measure their success by the financial results. Social enterprises have a double bottom line (or a triple bottom line.) This section describes the factors that will be evaluated to assess the success of each aspect of the enterprise.

• Quantifiable financial goals
• Quantifiable mission goals
• Monitoring and evaluation strategy

Financial Plan and Projections

The financial section includes projections for revenue and expenses for at least three years with a summary narrative of the key assumptions. This section also details the start up costs for capital equipment, inventory, initial marketing and staffing, and subsidy needed to cover losses during the start up period. These capital requirements may be funded from a combination of contribution from the nonprofit, grants for the enterprise, and/or debt financing.

• Start up costs and investments in equipment, technology, or one time costs
• Capital requirements and sources
• Income and expense projection
• Pro forma balance sheet for start up
• Cash flow summary or projection
• Assumptions and comments

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Social enterprise business plan: templates and examples.

7 August 2021

A social enterprise is an organisation that exists to address a social need. Think of it as a cross between a business and a charity. Like a business, a social enterprise sells products or services in exchange for cash. But like a charity, instead of using these profits to enrich shareholders, a social enterprise will instead channel them into schemes to help them achieve their social objectives.

How does a social enterprise work? There’s more than one way to run this type of organisation. For more information, read our complete guide to the various different social enterprise business models .

If you’ve got an idea for a social enterprise, you can also read our step-by-step guide to setting one up .

To get your social enterprise off the ground, you’ll need a source of funding. There are many grants and opportunities out there, and we have a guide to finding grants that works for you .

Do I Need a Business Plan for a Social Enterprise?

For your social enterprise funding applications to be successful, you’ll need a social enterprise business plan. In this post, we’ll explain what a business plan is, and link you to numerous templates that’ll help you put a solid plan together for your big idea.

What is a Social Enterprise Business Plan?

Your social enterprise business plan essentially outlines:

• Who you are,
• What you want to achieve,
• How you plan on achieving this,
• How you plan on funding this,
• And how you intend to measure your success.

Let’s explore the various sections you’ll need to include in your business plan, and the sort of information you’ll have to include.

How to Write a Social Enterprise Business Plan

1. executive summary.

This is where you outline, as succinctly as possible, who you are and what you want to do. It’s a proof of concept, something potential investors can skim over to get a good idea of your goals before they delve into the details.

Although your executive summary should open your social enterprise business plan, it’s a good idea to write it last, when you’ll have a better understanding of the market, your competitors, and other aspects of your plan.

The executive summary should include:

• A brief overview of the industry or sector you wish to enter, and of the problem you wish to address.
• A description of your organisation, and of your business concept.
• Your value proposition – why should people work with you, rather than your competitors?
• Key success factors – how will you measure your impact?
• A brief look at your finances – how much do you think you’ll make, and what sort of capital will you need upfront?

2. Your Mission Statement

This is where you expand upon the overview you gave in your executive summary.

Talk about the problem you want to address, and how you want to address it. Your focus is upon detailing how aligned your organisation will be with your mission. As we explored when we discussed the different type of social enterprise business models , some social enterprises help their beneficiaries directly, while others have a less direct relationship.

For example, The Big Issue exists to help the homeless, and they help them directly through paying them to distribute their magazines. The Big Issue are therefore directly aligned with their mission: Their business operations support their goals, and vice versa.

But on the other hand, consider TOMS Shoes , a social enterprise that exists to donate shoes to children in developing countries. To fund this enterprise, they sell shoes to customers in developed countries. And for every pair of shoes they sell, they donate another pair to their beneficiaries.

So when explaining your mission statement, take the time to explain how aligned your social enterprise will be with your goals.

3. Your Business Structure and Operations

This might prove to be the longest section of your social enterprise business plan. Detail how your social enterprise is structured, with a list of all the roles that will exist in your business, and the key responsibilities of each one.

This will demonstrate that you know what you’re doing, and that you’ll make good use of your resources. If you’re applying for funding, outlining your business structure might also help you justify your capital requirements. All the people you need to achieve your goals will need paying, of course!

In terms of your wider operations, you need to explain how you’ll deliver your core products and services, and how you’ll support your beneficiaries. So beyond your management structure and staffing plan, think about your supply chain, your material costs, and your provisions for customer services and support. You can also talk about the facilities you’ll need, along with any specialist equipment, all while accounting for future growth and improvements.

4. Market Analysis and Competitor Analysis

Who are your target customers, and how do you intend to meet their needs? And who are your main competitors, and how will your products or services stand out from the competition?

This section of your social enterprise business plan might include at least one SWOT analysis. SWOT stands for “Strength, Weakness, Opportunity, Threat.” So consider any recent or emerging changes in your sector or industry, as well as any unmet needs that you intend to provide.

5. Products and Services

What specific products and services do you intend to sell? Who’s the target customer for each, and what sort of market demands will each one meet?

There’s no need to talk about specifics at this stage, such as pricing and the supply chain. But you could talk about any future products or services you wish to provide, and how these will be aligned with your goals.

6. Marketing and Sales

How will you reach your target market? How will you convert any prospects into paying customers, and how might these paying customers become loyal, repeat customers?

At this point you’ll have already outlined your social enterprise’s business structure, and the various roles that will exist within your organisation. You’ll have also outlined the key responsibilities of each role. So readers at this point might already be aware that you’ll have a dedicated marketing professional on your payroll, and of the key duties you’ll expect them to perform.

But this section of your social enterprise business plan will allow you to go into specifics about your marketing plan. Which products will you launch first, and how will you introduce them to the market? Which channels will you use, and what sort of messages will you put out on them? Are there any special events, or awareness days, that you can use to spread your word and kindle interest in your products, services and cause?

At this stage you can also include a brief sales forecast. Taking into account all of your expenses, and the various strengths, weaknesses, opportunities and threats of the market, how much do you expect to make in your first year of business? And given your plans and your projected growth, how much do you expect to make in your second, third, fourth and fifth years of business?

7. Measuring Your Success

An ordinary business can measure its success by its bottom line. If the profits are on the rise, then the shareholders are happy, and thus everyone’s happy.

But a social enterprise is no ordinary business. Profits matter, of course. But to remain compliant , you’ll also have to demonstrate how you’re meeting your social goals. So how will you measure success?

For TOMS Shoes, who we mentioned earlier, measuring success must be easy. For every pair of shoes they sell, they donate another pair to a child in a developing country. So they can measure their success by simply counting the number of shoes they sell and, as such, the number they’ve been able to donate.

Similarly, Baron Fig is a social enterprise that sells notebooks, and for each notebook they sell, they plant a tree. They can count the number of notebooks they’ve sold to measure their profits, and count the number of trees they’ve planted to measure their social impact.

Some social enterprises operate as social firms, providing employment opportunities to people who might not otherwise find work. A good example of this is the Big Issue, who we mentioned above. Jamie Oliver’s Fifteen Restaurant is another example. They trained homeless people, ex-offenders, disadvantaged youth and others to work as chefs in their restaurant.

How might Fifteen Restaurant have measured success? On one level, just like any other restaurant – through assessing profit margins and customer satisfaction scores. But the Fifteen Restaurant could also consider every person they employed as a person who might otherwise have been in prison, on the streets, or otherwise struggling. So every person in full or part-time employment for Fifteen Restaurant could be considered a measure of success.

So what’s your social enterprise’s goal, and how will you know that you’re working towards achieving it? This part of your social enterprise business plan is essentially your opportunity to make it clear that your idea has potential.

8. Financial Considerations

Finally, the numbers. For at least the first three years of your operations, outline your revenue projections and your key expenses. This is also where you can outline your start-up costs. How much will you need to get everything off the ground, from staffing, to facilities, to production, to sales and marketing?

Talk about your intended sources of funding , and include a cash flow projection .

Remember: The more accurate you are about your expenses, and the more realistic you are about your revenue projections, then the more likely potential investors are to take your business plan seriously, and invest.

Social Enterprise Business Plan Templates

Many places online provide free social enterprise business plan templates. Not all of these follow the structure we’ve suggested above, and some of them are from the US, where there’s different legislation for social enterprises than in the UK. Nonetheless, by following our guide and any one of these templates, you should be able to put a social enterprise business plan together that will tick every box:

• Propel Non Profits
• Profitable Venture (this one uses a fictional social housing company as an example, to help you work out what sort of information to put in each section).
• Tools 4 Dev

Additional Support for Social Enterprises

If you’re setting up a social enterprise, writing your business plan should make it clear just how risky this business can be.

So to help you manage the risks, Worcester-based Hazelton Mountford offer specialist social enterprise insurance . It will cover your unique requirements as a not-for-profit business, ensuring you can support your cause with total peace of mind.