Planning For Social Ventures: Beugré C

Chapter 8
Planning for Social

Ventures
Beugré C.
Copyright ©2017 Routledge, Taylor & Francis Group. 8-1

Copyright ©2012 Pearson Education
Chapter Objectives
1. Understand the importance of writing a business plan.
2. Understand the importance of social venture planning.
3. Identify the components of a social venture plan.
4. Describe the process of writing a social venture plan.

What Is a Business Plan?
• A business plan is a written document that describes the current state and
the supposed future of an organization.
• It summarizes how an entrepreneur will create an organization to exploit a

business opportunity, and usually outlines the markets to be served, the
products or services to be provided, the resources required, including
money, and the expected growth and profit.
• It helps the entrepreneur spell out how the new venture will be run.
• The business plan has a dual purpose and serves both an external and
internal audience.
• Business plans can make a positive impact in two ways: by improving the
venture’s entrepreneurial capability; and by increasing the resources
available to the venture.
Comparing Business Plans and Feasibility Studies
• A business plan has primarily an external audience, whereas a feasibility

study has a largely internal audience.
• In doing a feasibility analysis, the focus is on the idea and whether the
entrepreneur should pursue it or not.
• In writing a business plan, the focus is on how the new venture will
operate.
• Writing a business plan implies that the venture is feasible and the
entrepreneur should now organize how it will be run.
• Table 8.1 illustrates the key points of comparison between a feasibility

study and a business plan.

Comparing Business Plans and Feasibility Studies
Feasibility Study Business Plan
Focus Internal (entrepreneur) External (stakeholders)
Approach Testing/discovery Convince/proving
Opportunity Is it worth pursuing? Convince others it is worth

pursuing
Resources What do I have? Here is what I need
Profits More conservative Exaggerated
Student Reshape or move on Stuck with bad idea

experience
Data collection Primary Secondary

Format of a Business Plan
• A business plan has three main components:
– The Executive Summary;

– The Core; and
– The Supporting documents.
• The following slide will describe the key elements of each of these
subsections.

Executive Summary
• The executive summary is the first part of a business plan.

• It summarizes the content of the business plan.
• It is the first part that a potential investor will read.
• If it tells a compelling story, the reader will be motivated to read the rest of
the business plan.
• Thus, the executive summary must be well crafted.
• It will generally include the following:
– name of company;
– mission;
– brief description of product/service;
– profitability issues;
– financial needs; and
– vision.
• These six elements should comprise a total of between one and two pages.

Core of the Business Plan
• The core of the business plan presents the various aspects of the plan in
detail.
• It includes:
– a description of the business;
– its mission and vision;
– the venture team;
– the marketing strategy;
– the industry analysis;
– the schedule of operations; and
– the financial statements.

Supporting Documents
• Also known as the appendix, this section includes résumés of the

founder(s), board members, and key personnel.
• It can also include product templates and relevant data as well as letters of
support from interested parties.
• For instance, if a foundation has pledged support for helping a social

venture accomplish its social mission, this should be included in the
supporting documents.
• If data are cited in the social venture plan, the sources must be provided.

Table 8.2 Components of a Business Plan
Executive Core of the Business Supporting

Summary Plan Documents
Brief summary of Includes the different Also known as the
the business plan aspects of the appendix, includes:
that generally business plan: supporting documents,
includes: name of description of the such as résumes of
company, mission, business, mission and founders and key
brief description of vision, industry managers, letters of
product/service, analysis, marketing support, product
profitability issues, strategy, schedule of templates, relevant data,
financial needs, and operations, financial etc.
vision. analysis, and risk
assessment.
The Wisdom (or Otherwise) of Writing a Business Plan
• Before discussing the writing of a social venture plan, it is important to

explain the benefits of writing a business plan as well as the potential
drawbacks.
• There is an ongoing debate among entrepreneurship scholars on the

wisdom of writing a business plan.
• This invites the following two questions:

– Does writing a business plan improve the odds of a new venture
launching?
– Does it lead to success for the new venture?
• Research on planning in general, and on pre-startup planning in particular,

has yielded mixed results

Drawbacks of Writing a Business Plan
• Some entrepreneurship scholars consider business plan writing as a worthless

activity that has no impact on improving a new venture’s performance.
• Some researchers found no evidence to support the contention that writing
business plans improves the new venture performance.
• In fact, many entrepreneurs may write business plans merely because others
are doing it or because external stakeholders, such as investors and other
financiers, expect it of them.
• Therefore, the process of writing a business plan is undertaken by nascent
entrepreneurs to gain legitimacy.
• These findings suggest that unless a would-be entrepreneur needs to raise
capital from institutional investors, there is no compelling reason to write a
detailed business plan.
• Rather, the entrepreneur should limit his/her efforts to making financial
projections, especially cash flow projections.

Drawbacks of Writing a Business Plan
• Several entrepreneurship scholars argue that:

– written business plans fail to communicate realistic goals or anticipate
problems,
– lack evidence of commitment to the venture,
– do not demonstrate that the entrepreneur has sufficient experience to launch
and run the venture
• Others contend that business plans merely present dry facts and do not
convey enthusiasm or commitment.
• Such criticism has led some scholars to advise making business plans more
personal.
• Still other entrepreneurship scholars argue that entrepreneurs rarely follow
their written business plans anyway.
• Other potential drawbacks includes lack of clarity, inaccurate financial
projections, and exaggeration of projections.

The Benefits of Writing a Business Plan
• Notwithstanding the drawbacks of writing a BP, many scholars argue that

writing a BP prior to starting a new venture improves performance and
survival.
• For example, Delmar and Shane argue that business planning offers the
following three advantages:
– it facilitates faster decision-making by identifying missing information
without first requiring the commitment of resources;
– it provides tools for managing the supply and demand of resources in a
manner that avoids time-consuming bottlenecks; and
– it identifies action steps to achieve broader goals in a timely manner.

The Benefits of Writing a Business Plan
• Many researches also found that business plans helped entrepreneurs to

– make better decisions and
– to turn abstract goals into concrete operational steps,
– reduce the likelihood of failure and accelerate product development.
• Business plans also provide evidence to potential investors that the

entrepreneur has thought through the process of starting the new venture.
• According to Timmons the business plan is much more than a fundraising

tool, it provides direction.
• Social entrepreneurs could benefit from writing their own plans (known as
social venture plans), especially when they are trying to enlist the support
of external stakeholders.

What Is a Social Venture Plan?
• A social venture plan can be defined as a written document that details how
a venture addressing a social need will be launched and run.
• It is to a social venture what a business plan is to a commercial venture.
• The type of social venture could have a significant influence on the

contents of the social venture plan.
• Some social entrepreneurs tend to believe that they can best express the
venture in person, utilizing all of the enthusiasm and optimism that
stimulated the enterprise rather than writing a social venture plan.
• But failing to write the plan is wrong! If you have no plan to succeed, then
you are planning to fail.

Writing a Social Venture Plan
• Although there are countless books on writing business plans, there are
very few on writing social venture plans.
• Perhaps the business plan literature serves a succinct guide to social

business plan.
• The contents of a business plan and that of social venture plan are similar,
but there are also some differences because social venture plan focuses
more on addressing a social issue.
• In addition, the marketing plan and the financial projections are different
from those of a commercial venture’s business plan.

Table 8.3 Outline of a Social Venture Plan
1. Executive Summary 5. Social Venture Management 8. Social Impact

Team •Social return on investment
2. Social Venture •Background of team members •Scaling of the social venture
•Board of directors
Description
• Mission statement •Board of advisers 9. Critical Risks
• Vision •Employees •Additional risks
• Type of social venture •Proactive management
6. Social Venture Operations •Insurance provisions

3. Social Landscape Analysis •Key activities
•Physical location 10. Supporting
•Timeline of activities Documents/Appendix
4. Social Venture Marketing
•Founder’s and partners’ résumés
Strategy
•
7. Financial Projections •Employees’ résumés
Beneficiary/customer segment
•Capital requirements •• Additional materials
• Social value proposition
•Assumptions sheet
• Promotion
•Beginning balance sheet
•Years 2, 3, comments on financial
statements
•3-year projected income statements
•3-year projected cash-flow statements
•Break-even analysis

1. Executive Summary
• This section presents the summary of the social venture plan.
• It is the last thing to write in the social business plan, but the first to appear
in the final report.
• It is the first part that a potential investor will read.

• This section must be compelling to attract stakeholders especially donors.
• It will generally include the following:

– name of company;
– vision and mission;
– brief description of product/service;
– profitability issues; and
– financial needs.

2. Description of the Social Venture
• This section presents the social venture to the reader.

• Thus, the social entrepreneur should describe his/her venture in detail.
• Here, the mission and vision of the social venture should be stated.
• The location and legal form of the social venture should also be indicated.
• The social entrepreneur may provide a historical perspective of the idea.

• What prompted the social entrepreneur to consider pursuing this idea?
• Where did the idea originate?
• This section must be thoroughly developed to attract potential donors.

3. Analysis of the Social Landscape
• In commercial entrepreneurship, it is important for entrepreneurs to understand

the industry that the new venture will enter.
• The industry’s size, its growth rate, structure and the sales projections should
all be indicated.
• Obtaining such knowledge is also important for social ventures because every
social venture operates in a particular environment.
• To differentiate this analysis from a classical industry analysis, the construct
of “social venture landscape” is used to describe the external environment of
social ventures.
• This environment includes competitors as well as economic, cultural, and
social factors.
• The social entrepreneur should also identify the critical success factors in the
industry.
• This section should also include the trends affecting the social landscape, such
as PEST trends.

4. Market Analysis
• Generally, in a commercial business plan, the section on marketing analysis

follows the industry analysis and focuses on a particular segment of the
industry.
• Marketing analysis consists of two main elements: market segmentation and
competitor analysis.
• No venture can satisfy all customers. Thus, it is important to target a
particular segment.
• A market can be segmented by geography (region, state, city), gender (male,
female), income, or any other criterion.
• The business plan should describe in detail the chosen segment of the market.
• The second aspect of the market analysis—competitor analysis—is a detailed
assessment of the participants in the industry.
• The purpose of a competitor analysis for social ventures is to understand the
social landscape of competing social ventures.

5. Social Venture Marketing Strategy
• The social venture’s marketing strategy will consist of three main parts:
– Identification of the beneficiary or customer segment;
– Formulation of the social value proposition; and
– Strategies to reach the beneficiaries or customers.

5a. Identification of the Beneficiary or Customer
Segment
• The first part of the marketing analysis identifies the potential customers or
beneficiaries.
• At this level, it is important to answer the question: who are the

beneficiaries or customers?
• The social entrepreneur may explore the extent to which the beneficiaries or
customers will buy the products or services themselves or whether a third
party will buy them.
• This section should answer the following questions:

– How will you identify specific customers?
– How will you target these customers?
– How will you attract these customers?
– Will these customers purchase the products or services or will third parties pay
for these services?

5b. The Social Value Proposition
• The social entrepreneur must clearly indicate how the social venture will
deliver value to the beneficiary or customer.
• This section should be well crafted to entice potential stakeholders who
may be willing to support the social venture.
• In doing so, the entrepreneur must address the following questions:

– What is the product or service providing to the customer?
– Will this product or service make a difference in the life of the beneficiary?
– What impact will it have on the community?
• At this level, the social entrepreneur may decide to develop metrics to

measure potential impact or include a section on impact measurement.
• This section should also include a description of the product or service.
• The social entrepreneur may also include a product or service prototype.

5c. Strategies to reach the Beneficiaries or Customers
• In this section, the social entrepreneur should explain how the product or
service will reach its targets by asking: how will the product or service get to
the beneficiary or customer?
• This section must include a description of sales activities, advertising,

promotion strategies, as well as the purchase process and channel(s) of
distribution.
• Internal and external sales forces and tasks must be described, and sales goals
must be set.
• The social entrepreneur must also determine the pricing structure, the expected
margins, merchandising, and beneficiary or customer support policies in the
case where the social venture is involved in earned-income activities.

6. Management Team and Social Venture Structure
• It is important to indicate the people who will manage the social venture
and what activities they will perform.
• It is also necessary to identify key managerial and organizational skills that
are requirements for various positions within the social enterprise.
• This section should have three parts:

– the social venture team;
– the board of directors or advisers; and
– the organizational chart.
• The new social venture team includes the founder(s) and key personnel.
• Provide the profile for each team member including the duties and
responsibilities of each team member as well as their experience and
background.

7. Operations of the Social Venture
• This section should focus on the activities that must be performed to generate
value for the customer or beneficiary.
• Issues such as what activities will be performed and who will perform them as
well as facilities and equipment required must be stated.
• This section is all about implementation and execution.
• The entrepreneur should provide a detailed description of the activities
necessary to run the day-to-day operations of the social venture.
• It may be important for the social entrepreneur to differentiate between front-
line activities and backstage activities as well as set priorities.
• This section should also include the geographic location of the social venture
because, location can help build a competitive advantage.
• The social entrepreneur should also indicate the timeline of critical operations,
such as the dates when certain activities, such as incorporating the social
venture, writing grants, hiring key personnel, and buying equipment, will
commence. It is advisable to draft a table of activities.

8. Financials of the Social Venture
• This section should usually start with the economics of the social venture—that
is, a description of how the venture will generate revenue and a comparison of
this revenue with costs.
• The revenue stream of a social venture may include donations, grants, or
earned income.
• However, applying for a grant would incur some costs related to paying
whoever drafts the grant application.
• In commercial entrepreneurship, costs associated with generating revenues are
often described as costs of goods sold (COGS). In social entrepreneurship, such
costs could be described as costs of revenue generation.
• The social venture plan must include financial projections. Three types of
financial statements are useful and should be included:
– income statements;
– balance sheet; and
– cash-flow statements.

9. Social Impact Measurement
• The social entrepreneur must identify the potential impact of the social
venture.
• This comprises the consequences of the social venture on the entire
community.
• This section should also include a measurement of social return on
investment (SROI).
• By indicating the potential social impact of the social venture, the social
entrepreneur will demonstrate the social benefit of the venture to potential
stakeholders.
• When measuring social impact, the social entrepreneur must show that the
venture meets both financial performance and social objectives.
• A social venture that demonstrates a clear social impact and a social return
on investment is far more likely to attract potential stakeholders than one
that does not.

10. Risk Assessment
• Entrepreneurship is a risky business. This is true in both commercial and

social entrepreneurship.
• Thus, the social venture plan should contain a section on risk assessment
and strategies to mitigate the effects of such risks.
• The social entrepreneur must identify the potential risks that the social
venture may face, including political risks, financial risks, economic risks,
talent risks, and any other factors that might prevent the social venture
from accomplishing its mission.
• For example, some social ventures operate in developing countries where
corruption and political instability are endemic.
• A good example of this is Dignified Mobile Toilets (see Chapter 3), which
operates in Nigeria, a country where corruption and insecurity are rampant.
• If the social venture relies on donations and grants, it is always useful to
determine alternative sources of funding should a particular grant run out.

11. Supporting Documents
• This section, which is generally the final one, includes the founder’s or
founders’ résumés, the résumés of key employees, and copies of contracts
or templates of products if needed.
• The entrepreneur may also include:
– market analysis data and market research studies;
– action plans for sales and distribution;
– product specifications and photos;
– action plans for production, operations, and service;
– letters of reference;
– census and demographic data;
– contracts;
– letters of commitment from customers, suppliers, and lenders; and
– buy/sell agreements among partners.
• They might also include letters of support from potential stakeholders,
such as donors and/or government agencies.

Presenting a Social Venture Plan
• Presenting a social venture plan is both an art and a science.

• As an art, the presentation depends on the communication skills and
personality of the social entrepreneur or the social venture team.
• The presentation represents an opportunity for the social entrepreneur to
make a good first impression and attempt to persuade potential donors
and/or investors of the quality of the social venture.
• However, they should not engage in actions that may result in potential
investors perceiving them as dishonest, opportunistic, or simply
misinformed or unrealistic about the actual risks their ventures will face.
• Possessing good communication skills and a positive personality can lead
to a good presentation.
• However, the content of the social venture plan and the value of the social
idea are of paramount importance.

Preparing the Presentation
• The entrepreneurs should prepare some PowerPoint slides as visual display

helps to capture an audience’s attention.
• However, a limited number of slides generally, between 12 and 14 slides
will be okay.
• The first slide should contain the name of the social venture and logo as
well as the name(s) and contact details of the founder(s).
• The second should include an outline of the presentation.
• It is important to present the social venture plan together with your team.
• It is important to share this task equally among all members.
• It is also advisable to make a mock-presentation.
• Finally, the team should arrive at least 15 minutes before the presentation to
set up, and check that all equipment is in working order.

Table 8.4 Guidelines for Social Venture Plan
Presentation
S/No. Topic Explanation
1. Title slide Introduce the presentation with your social venture’s name and the
name of the founder(s).
2. Problem State the social problem to address.
3. Solution Explain how your social venture will successfully address this
social problem.
4. Beneficiary or Identify the beneficiary or customer segment.
Customer
5. Social Landscape Explain the social environment of the social venture, including
other social ventures that address similar social issues. Explain
how the social venture will cooperate with or compete against
existing social ventures.
6. Marketing and Explain the social venture’s marketing strategy.
Sales Explain whether beneficiaries or third parties will pay.
Identify advertising strategies and pricing issues.
7. Management Team Describe the social venture’s management team.

Explain the backgrounds of the team members and the skills they
possess to run the social venture successfully.
Explain the management structure and explain whether the social
venture will employ workers or recruit volunteers.

Table 8.4 Guidelines for Social Venture Plan
Presentation
S/No. Topic Explanation
8. Financials Briefly discuss the financials. Stress when the firm will achieve
profitability, how much capital it will take to get there, and when
its cash flow will break even.
Use additional slides if needed to display your information
properly, but don’t go overboard.
9. Social impact Explain the social impact of the social venture. Issues of impact
on the community and social return on investment should be
discussed.
10. Financing sought Determine how much financing you will need for the social
venture and how you will use it.
11. Conclusion/summary Conclude by highlighting the key points of the social venture.

Tips for Making a Convincing Presentation
• There is no universal format for successful presentation of a venture plan.

• However, some guidelines might give entrepreneurs an edge in presenting
their plans to an audience.
• Generally, as a rule of thumb, presenters should maintain eye contact and
avoid reading too much of the text on their slides. Therefore rehearsal is
important.
• Questions from the audience should be answered clearly and succinctly.
• If the presenter does not have a ready answer to a particular question, it is
better to acknowledge that fact rather than guess or lie.
• Honesty and integrity are important in persuading people to invest in a
venture and generating interest for an idea.
• Appearance is also important—it is always better to dress professionally

rather than casually.

Thank You!


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Chapter 8

Planning for Social

Copyright ©2017 Routledge, Taylor & Francis Group. 8-1

1. Understand the importance of writing a business plan.

2. Understand the importance of social venture planning.

3. Identify the components of a social venture plan.

4. Describe the process of writing a social venture plan.

Copyright ©2017 Routledge, Taylor & Francis Group. 8-2

• It summarizes how an entrepreneur will create an organization to exploit a

• A business plan has primarily an external audience, whereas a feasibility

• Table 8.1 illustrates the key points of comparison between a feasibility

Copyright ©2017 Routledge, Taylor & Francis Group. 8-4

Feasibility Study Business Plan

Focus Internal (entrepreneur) External (stakeholders)

Approach Testing/discovery Convince/proving

Opportunity Is it worth pursuing? Convince others it is worth

Resources What do I have? Here is what I need

Profits More conservative Exaggerated

Student Reshape or move on Stuck with bad idea

Data collection Primary Secondary

Copyright ©2017 Routledge, Taylor & Francis Group. 8-5

• A business plan has three main components:

– The Executive Summary;

Copyright ©2017 Routledge, Taylor & Francis Group. 8-6

• The executive summary is the first part of a business plan.

Copyright ©2017 Routledge, Taylor & Francis Group. 8-7

Copyright ©2017 Routledge, Taylor & Francis Group. 8-8

• Also known as the appendix, this section includes résumés of the

• For instance, if a foundation has pledged support for helping a social

Copyright ©2017 Routledge, Taylor & Francis Group. 8-9

Executive Core of the Business Supporting

• Before discussing the writing of a social venture plan, it is important to

• There is an ongoing debate among entrepreneurship scholars on the

• This invites the following two questions:

• Research on planning in general, and on pre-startup planning in particular,

Copyright ©2017 Routledge, Taylor & Francis Group. 8-11

• Some entrepreneurship scholars consider business plan writing as a worthless

Copyright ©2017 Routledge, Taylor & Francis Group. 8-12

• Several entrepreneurship scholars argue that:

Copyright ©2017 Routledge, Taylor & Francis Group. 8-13

• Notwithstanding the drawbacks of writing a BP, many scholars argue that

Copyright ©2017 Routledge, Taylor & Francis Group. 8-14

• Many researches also found that business plans helped entrepreneurs to

• Business plans also provide evidence to potential investors that the

• According to Timmons the business plan is much more than a fundraising

Copyright ©2017 Routledge, Taylor & Francis Group. 8-15

• It is to a social venture what a business plan is to a commercial venture.

• The type of social venture could have a significant influence on the

Copyright ©2017 Routledge, Taylor & Francis Group. 8-16

• Perhaps the business plan literature serves a succinct guide to social

Copyright ©2017 Routledge, Taylor & Francis Group. 8-17

1. Executive Summary 5. Social Venture Management 8. Social Impact

Copyright ©2017 Routledge, Taylor & Francis Group. 8-18

• This section presents the summary of the social venture plan.

• It is the first part that a potential investor will read.

• It will generally include the following:

Copyright ©2017 Routledge, Taylor & Francis Group. 8-19

• This section presents the social venture to the reader.