Santa Clara University

Provide the information summarized below in your business plan summary using the worksheet template or your preferred format.

 

3.1 Mission, Opportunity, Strategies, and Impact

Define your Mission, the Opportunity for Scaling, the Strategies for Scaling, and Your Impact. This document describes your "Theory of Change" with evidence of impact (i.e., of the change). Your Mission
describes what you want to change for whom in 10 words or less and includes a single metric for that change. The Opportunity describes the number (size) of the potential impact of the change. The Strategies describe how the change will be accomplished through major programs. The Impact describes how you are measuring the change.

Mission Statement and Single Metric

Create a short (less than 10 word) mission statement for your organization that captures the key "Theory of Change" for your organization (i.e. describes what change you are seeking and who/what this change affects). Select a single metric that you will keep to measure the success of your enterprise in achieving this mission.

Opportunity

Provide a quantitative description of the Opportunity (the size of the opportunity for change) for your enterprise and the key characteristics (what is the nature of the change) of the Opportunity. 

Key Strategies 

List no more than 10 key strategies (programs) you will need to implement to create the change specified in your Mission Statement for the beneficiaries described in your Opportunity. And list the metric that will tell
you whether each strategy is working (being successful). 

Evidence of Impact 

Provide the following information for up to five key metric(s) of your organization's impact (the change):

Metric	Collection Method	Past Year	Current Year	Next Year (Goal)
x	x	x	x	x

 

3.2 Value Proposition 

Value Propositions are brief descriptions of your organization and the value it provides, and articulate why the target customer/beneficiary will choose to buy or consume your product or service offering(s) over other alternatives (note, one of the alternatives may be non-consumption). Value propositions often can be one sentence of the form:  

[Name of organization] provides [products/services], which are [statement of key differentiators], for
[target beneficiaries], and thereby creates [statement of social value/impact], unlike [competition].

Example Value Proposition: For the millions of people in India with cataract blindness, the Aravind Eye Care System profitability provides diagnosis, treatment, and post-operative care, which is 100% safe, has a greater than 95% chance of cure, is less than 1/5 of the cost of comparable care, and is free for those who cannot afford to pay. Unlike government run hospitals, Aravind provides high-quality cataract surgery in a professional and ethical manner, serving all patients with dignity. Unlike those who do not receive quality surgery, patients are able to return to productive lives. 

 

3.3 External Environment

The External Environment includes all the elements that effect an organization that it cannot control. The elements have to be mitigated if they are adverse, or leveraged if they are potentially helpful. All organizations are affected positively and/or negatively by their External Environments. Examples of External Environment elements that may affect your business include: lack of transportation or communications infrastructure, lack of electricity (or of reliable electricity), difficulty in creating and enforcing contracts, lack of banking or other financial systems, lack of ability to protect intellectual property, complicated tax or business regulation laws, governments or cultural groups that may be hostile or exceedingly bureaucratic (opaque), extreme climate or geography. The External Environment may vary significantly among countries, even those that are geographic neighbors (e.g. the United States and Mexico), and this often creates additional difficulties for scaling a social business. External Environment elements may be assets that increase potential income, or reduce the expenses, or simplify operations (e.g. a law requiring using locally manufactured products or tax breaks for contributions to certain organizations) or liabilities that limit income, increase the costs, or make operating more complex (e.g., frequent floods or potential governmental power changes). For assets, the key is to be able to leverage the elements, and for liabilities, the key is to have a plan to mitigate them should they occur.  

Consider the following five categories in identifying the key elements of the External Environment that affects your organization:

For each element of the External Environment that affects your organization, you should identify what it is, whether it is an asset or a liability, and how you will leverage or mitigate this element.  

 

3.4 Market/Beneficiary Analysis and Sales/Marketing Plan 

Beneficiary analysis describes the size and characteristics of the clients/beneficiaries of the organization (those individuals or groups that the organization is intended to serve). This analysis to should consist of four parts:  

1. Define the total addressable market (those beneficiaries for whom your product/services could be made available in a reasonable amount of time).
2. Define how your product/service compares with alternatives (including non-consumption) in terms of meeting the needs of (accomplishing the social change for) your beneficiaries.
3. Create a market segmentation table that identifies the characteristics of your beneficiaries that are relevant to the beneficiaries’ decision to use your product/services.
4. Show the sales and marketing plan for how you will to reach the intended beneficiaries.

 

3.5 Key Operations and Value Chain  

The Operations and Value Chain for your organization describes the key processes you will implement to create value for your beneficiaries, which of these process are best carried out by partners, and how value (and, if appropriate, money) flows between/among those processes and partners. Together with the Business Model, the Operations and Value Chain describe how your business works to create value for your beneficiaries.

Your Operations and Value Chain are the basis for creating the organization, partnerships, and procedures needed to implement your mission. They are the means for creating the impact (value/change) that your Mission Statement describes. Your Operations are the key processes you will implement to create value for your beneficiaries and the Value Chain shows the relationships among the processes. You will need at least one process for each of the Key Strategies created – so a good way to identify your key processes is to look at your Mission, Opportunity, Strategies, and Impact and identify the key tasks that need to be accomplished to implement the Strategies you identified that are needed to create the change/impact you intended with your Mission.  

The Value Chain identifies the flow of information, products, and possibly money among processes (and partners if appropriate). A Value Chain showing flow of goods among partner organizations in order to create a final product/service for a beneficiary often is called a Supply Chain. Both Value Chains and Supply Chains can be drawn as flow diagrams. If there are multiple partners involved in implementing a Value Chain or Supply Chain it is important that each partner identifies what return, monetary or other benefit, they receive for each unit that they handle as part of the value chain. 

 

3.6 Organization, Governance, and Key Partners 

1. Provide an organization chart for your enterprise with the names and positions of each key employee. If there are volunteers, develop the basic tasks of volunteers and the number of volunteers that are available for each task.  
2. Provide a description and list of members with qualifications and roles/responsibilities for your Board of Directors and any Advisory Boards (of Advisors). 
3. Describe the Key Partnerships for your organization using the following taxonomy. For each partnership list the type of partnership and specify the value exchanged and the written agreement that governs the partnership. 

Type of Partnership	Value Exchanged	Written Agreement
Network	Information (e.g. client names)	Memorandum of Understanding (MOU)
Coordination	Share similar processes for separate beneficiary groups; or have separate processes for the same beneficiaries	Memorandum of Understanding (MOU)
Cooperation	One partner outsources (and pays for) processes to another	Contract
Collaboration	Partners work together to implement processes (each partner pays their own expenses)	Contract

 

3.7 Business Model and Unit Economics

List the key income drivers (sources of income) that monetize (fund) your Value Proposition. Income drivers may be based on earned income such as sales of products, licenses, or services, or on contributions to support your achieving your value proposition. For each income driver you need to specify the source of the income and the basis. The sources should be identified as either earned or contributed income. Examples of earned income are sales of products/services, licensing or franchising fees, or third party payments for goods or services distributed. Examples of contributed income include donations and cause-related marketing payments. While grants should be included in your cash flow statement, do not include them as income. The basis may be per time-period (e.g. annually – for donations), per unit (e.g. for each product or beneficiary), per use (e.g. of a license), or per transaction. For example, the income drivers for cataract surgeries could be earned based on paying customers where the basis is the number of paying beneficiaries and the amount each pays. For each income source please identify the amount/percentage of total income for the current year that each source represents.  

In addition to the key income drivers, you also need to identify the key expense drivers (costs) that are necessary to create the value you describe in your Value Proposition, including any fundraising or sales expenses necessary to create your income streams. Expense drivers can be categorized by major programs, by type (line item), or both (e.g. line items within programs). Examples of expense drivers categorized by program would be: product development, marketing, sales or beneficiary recruiting, distribution, service, and overhead. Expense Drivers categorized by line item would be: salaries and benefits, commissions, fees, materials, rent, utilities, transportation, and depreciation. Expense drivers, like income drivers, have a source (the category or line item) and a basis (per time period, per unit, per transaction, or per use). It is often useful to know whether your expense drivers are fixed (do not change with volume or time), variable (occur over volume or time), semi-variable (fixed plus variable), or one-time (non-recurring). For each expense driver you should identify the stream (type) of expense (e.g. employee salaries) and the basis (salary per employee).

Finally, from your Mission/Key Metric, select the unit that best describes a single successful outcome to show the costs and income per unit of change. For example, one person is cured of cataract blindness, or one power plant is operational, or one person gets a job, or one family's income doubles. From your financial statements, show the cost per unit, income per unit, and then surplus/deficit per unit.  

 

3.8 Metrics Dashboard  

Create a list or a table of the 10-12 metrics you use to manage your organization, divided into the following categories.  

Financial Resource Metrics  

Financial resource metrics usually are those obtained by measuring income, expenses, and cash balance (e.g. from monthly financial reports, but may also include balance sheet items such as assets like inventory or accounts payable and liabilities).  

Organizational Resource Metrics  

These metrics attempt to measure the human or physical resources involved in carrying out the mission of the organization. Number and qualification of employees (volunteers), number of unfilled positions (including volunteer positions), and employee (and volunteer) turnover are common measures of human resources. Size and number of facilities or other physical assets are common measures of physical resources. If there is substantial dependence on partners for operations, then organizational metrics often include number and performance/quality of partners. Management, or a human resources department in larger organizations, usually collects organizational metrics.  

Activity/Process Metrics  

These metrics of processes or operations of an enterprise can be used to assess efficiency and effectiveness of the operation (value chain). Activity metrics include counts (e.g., number of beneficiaries served, hours of service provided), milestones (dates by which to achieve an objective), and productivity (output per unit time or cost). Often it is useful to compare these metrics against targets (baselines, previous time periods, or alternatives). Transformation metrics often can be gathered as part of day-day-operations.  

Outcome Metrics  

These metrics measure the results of the transformations (activities/processes), and can include counts of output, quality (successful output). While some these metrics may be captured as the result of operations, some may need to be collected by a survey of beneficiaries. Survey questions need to be designed carefully so that collection is not an imposition on the beneficiaries and so that the questions don't bias the answers (e.g. how well did you like our service versus how did you like our service). These metrics may also be collected as part of normal operations.  

Impact and Return on Investment Metrics  

Impact metrics measure the changes in the economic or social systems that result from the outcomes of the enterprise. These metrics are the most difficult to collect because they may need to be collected over time (e.g. changes in health or income). In some cases it may be difficult to determine whether it was the outcomes of your enterprise that created the impact (e.g., does a low-cost computer improve learning). Impact metrics may also require before-and-after or control group comparisons. Therefore, the best impact metric for your dashboard may simply be a successful outcome (e.g. an unemployed person who is trained gets a job). Note that the successful outcome is very likely the single metric you created for your Mission.  

 

3.9 Future Financing: Needs and Uses  

For all financing that you are seeking, please list the amount, source, timing, how the financing will be used (e.g. operating expenses, payback loans, capital expenses), and any anticipated return of funds terms (e.g. interest rates, demand dividends, equity). 

 

Background Resources
1. Bloom, Paul. Scaling your Social Venture, New York, Palgrave MacMillan, 2012, Chapters 1 and 2
2. Dees, J. Gregory, Jed Emerson, and Peter Economy. Strategic Tools for Social Entrepreneurs: Enhancing the Performance of Your Enterprising Nonprofit. New York: John Wiley, 2002. Print. Chapter 1.
3. DeThomas, Art, and Stephanie A. Derammelaere. Writing a Convincing Business Plan. Hauppauge, NY: Barron's Educational Series, 2008. Print.
4. Osterwalder, Alexander, Yves Pigneur, and Tim Clark. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Hoboken, NJ: Wiley, 2010. Print.