For almost ten years, Enterprising Non-Profits (enp) has been providin g grants and resources to support social enterprises during the planning stage of their development. And continually we are reminded through our work with nonprofit organizations starting a social enterprise just how important the investment in proper planning is to the success of the potential social enterprise.
Planning is key for several reasons; it addresses the questions: where are we going, why are we going there, how do we get there, and how will we measure success? For a social enterprise, planning includes getting the right business case thoroughly prepared; assuring the product and market match are clear and real; clarifying the social, cultural or environmental outcomes and measurements; understanding the impact on the organization initiating the enterprise, and the potential impact in the community.
However, the planning involves not only the actual written research and planning “products,” it is also an essential process to bring the board, staff and key stakeholders into alignment around the social enterprise purpose, risk, investment and impacts. With both the planning products and process, the chance of eventual success is so much greater.
The very first step in the business planning and development path is ensuring that your organization is actually ready to go down the road of social enterprise. Building a successful social enterprise requires the sound foundation of a healthy organization.
“Ensure that the organizational readiness piece is done well. It would have been easy for us to barrel through this piece and gone ahead with the feasibility study, but having [it] done well and bringing in a facilitator allowed us to come together as an organization, seek the best ideas and solutions to our current challenges, and gain the buy-in necessary for success from all the people in our organization.” [enp grant recipient]
By ensuring that your organization has built its capacity in the following eight areas, you will be better prepared to take on the challenges of starting a business.
- Clear vision and mission statements: Your board and staff must understand the values upon which your vision and mission statements are based.
- Strategic plan: A specific strategic plan must be adopted, by which your agency has identified opportunities and threats and can respond and change the plan as situations arise. Thus, the staff and board of your organization will need to periodically review the plan.
- Internal change: Your organization must have the capacity to manage change in a positive manner.
- Internal conflict: Your organization must have the skill to manage internal conflict.
- Financial management: Your nonprofit needs to be clearly aware of its financial position and to have developed a likely financial scenario for the next two to three years that defines the likely threats and opportunities and your organization’s intended responses to them.
- Cost-effectiveness: Closely related to financial management, cost-effectiveness must be considered when your organization evaluates its services and programs.
- Personnel: Your agency must have explicit personnel policies, with clear job descriptions and lines of responsibility and authority. But more than that, it will have a culture that encourages staff to be creative and to take risks.
- Learning organization: Your organization must be committed to ongoing learning.
This list highlights eight significant organizational behaviours and attitudes that can help you make the transition to an entrepreneurial approach. Where learning and capacity development is required, you can map out an action plan and timeline for these inputs as part of your organizational readiness and development process, adding to it as you go on to assess both social enterprise readiness and business readiness.
As another enp grant recipient pointed out after doing their organizational assessment: “We now know the issues we have to overcome from a business readiness point of view and we know the best path forward in working with business partners.”
Once you get through this initial step, you’ll be ready to proceed further in the planning process: identifying business opportunities that fit with your organization and mission, preparing a feasibility studyto assess whether it will work, and then completing a business plan outlining how it will work. We’ll explore these next steps in future articles.
For more information on social enterprise planning and development go to enp’s website at www.enterprisingnonprofits.ca, and also watch the site for the release of the 2nd Edition of the Canadian Social Enterprise Guide, currently in production and available late June 2010.
David LePage is the program manager of Enterprising Non-Profits, enp, a unique collaboration of funders who provide support for social enterprise development. He is also a member of the Social Enterprise Council of Canada, and the Policy Council for Canadian Community Economic Development (CCEDNet).