Business planning

A practical guide to creating a business plan

Why make a business plan?

Many small charities and community groups only create business plans when funders require them. However, formally documenting your organization's plans offers significant benefits beyond satisfying grant requirements:

• Ensures collective leadership - Keeps the entire board of trustees in charge rather than just a few individuals

• Provides direction - Helps your organization move forward purposefully rather than simply drifting

• Encourages innovation - Creates space to consider new ideas and approaches

• Prompts improvement - Identifies activities or services that aren't working well

Creating your business plan

The planning process

While one person may handle the actual writing, effective business planning should be collaborative:

1. Arrange a meeting with all interested parties for an open discussion about the organization's future.

2. Include trustees, volunteers, staff, service users, and potentially funders.

3. Identify common aims and priorities emerging from these discussions.

4. Draft a proposal based on this input.

5. Circulate the draft for comments and feedback.

6. Present the revised plan to your board of trustees for formal adoption.

Remember: The final responsibility for approving the plan rests with your trustees.

What to include

Keep your plan concise—shorter documents are more likely to be read and used. If a longer document is unavoidable, include an executive summary highlighting key points.

1. Introduction

• Purpose of the document

• Intended audience

• Consultation process used

• Document contents

• Executive summary of key points

2. Context

• Description of the environment your organisation operates in

• Current issues affecting your sector

• Overview of other available services

• Relevant developments in local or national policy

3. Your organisation today

• Brief history

• Summary of current activities and services

• Organisational structure (trustees, staff, volunteers)

• SWOT analysis (strengths, weaknesses, opportunities, threats)

• Current financial position (reserves, income, expenditure)

4. Needs assessment

• Analysis of needs for your existing services

• Identification of unmet needs your organisation could address

5. Long-term goals (3-5 years)

• Services you plan to provide

• Resources required (people, premises, equipment)

• Organizational structure needed

• Desired impact and outcomes

6. Short-term goals (next 12 months)

• Specific steps to be taken

• Priorities among these actions

• Responsibilities (who will do what)

• Timelines for completion

7. Financial projections

• Detailed budget for the next 12 months

• Less detailed projections for years 2-3 (or 5)

• Funding strategy and income generation plans

8. Monitoring and review process

• How progress will be tracked and reported

• How trustees will oversee implementation

• Schedule for reviewing and updating the plan

The rolling plan approach

One challenge with business planning is the difficulty of predicting the future, especially for grant-dependent organisations. A "rolling plan" approach can help keep your planning relevant:

• Conduct an annual review of your business plan.

• Update the full document each year, maintaining the same time horizon (e.g., create a new 3-year plan each year).

• This keeps your plan current despite changing circumstances.

• While this requires additional effort, it prevents disconnect between plans and reality.

Getting started

Some organisations avoid planning because of funding uncertainties. However, even an imperfect plan provides focus and ensures trustee oversight. Without planning, organisations tend to drift or become dominated by a few individuals.

If you need assistance developing your business plan or would like feedback on a draft, please contact us for support.