Business planning for social entrepreneurs

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Slides from session 4 of my course in the "Design for Social Business" at Istituto Europeo di Design Milano in spring 2011. The course is experimental, started as a collaboration between IED and Grameen Creative Lab

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  • Business planning for social entrepreneurs

    1. 1. //PLANS//Business planning for the social enterpriseAlberto CotticaD4SB Master CourseFrom opportunity assessment to business planning in social businessLesson 4
    2. 2. Two purposes: self-awareness and communication to prospectiveshare/stakeholders
    3. 3. • WHAT do you want to do, and WHY do we need it?
    4. 4. • WHAT do you want to do, and WHY do we need it?• WHO are you and your allies, and WHY are you uniquely equipped to carry it out?
    5. 5. • WHAT do you want to do, and WHY do we need it?• WHO are you and your allies, and WHY are you uniquely equipped to carry it out?• HOW are you going to make the business part of this sustainable? WHICH resources will you need? WHICH revenues will you generate?
    6. 6. Use data
    7. 7. What
    8. 8. State the problem you are trying to address
    9. 9. Explain your big idea
    10. 10. MAKE A CASEfor why we need it
    11. 11. Who
    12. 12. What makes you unique? WhoPeople power ideas else do you need?
    13. 13. How
    14. 14. Social, but still business! Not just costs, but revenues too!
    15. 15. Estimating revenues
    16. 16. Estimating revenues•possibly the hardest part of a BP!
    17. 17. Estimating revenues•possibly the hardest part of a BP!•what drives it? Metrics are appreciated
    18. 18. Estimating revenues•possibly the hardest part of a BP!•what drives it? Metrics are appreciated•use market research data: do your own surveys and interviews when possible
    19. 19. Estimating revenues•possibly the hardest part of a BP!•what drives it? Metrics are appreciated•use market research data: do your own surveys and interviews when possible•a guess is better than nothing
    20. 20. Estimating revenues•possibly the hardest part of a BP!•what drives it? Metrics are appreciated•use market research data: do your own surveys and interviews when possible•a guess is better than nothing•the value is in the exercise, not in the estimate
    21. 21. Estimating costs
    22. 22. Estimating costs•much easier, still not easy
    23. 23. Estimating costs•much easier, still not easy•highlight your costs (efficiency) advantages
    24. 24. Equilibrium
    25. 25. Equilibrium•economic: revenues > costs
    26. 26. Equilibrium•economic: revenues > costs•financial: assets balance liabilities over any given time horizon, i.e. you can pay your debts!
    27. 27. Equilibrium•economic: revenues > costs•financial: assets balance liabilities over any given time horizon, i.e. you can pay your debts!•“cash flow is king”
    28. 28. $ revenue (cumulated) costs (cumulated) initial investment break even time
    29. 29. $ revenue cost time
    30. 30. $ revenue cost r–c = financial surplus time
    31. 31. $ revenue cost r–c = financial surplus time you need this much!
    32. 32. Some financial complications
    33. 33. Some financial complications•investments imply costs now, yield returns later
    34. 34. Some financial complications•investments imply costs now, yield returns later•normally they are depreciated — shared among the time period for which they yield returns
    35. 35. Some financial complications•investments imply costs now, yield returns later•normally they are depreciated — shared among the time period for which they yield returns•growth normally implies financial hardships
    36. 36. Package
    37. 37. Metrics
    38. 38. Market segmentation
    39. 39. Timeline

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