A Step by Step Guide to Strategy and Business Planning

A Step by Step Guide to Strategy and Business Planning

Our most recent Skills Survey showed some interesting results when it came to strategic and business planning with 31% of the charities responding reporting not having a formal business plan. Business planning was also the area which was identified as requiring the most development for small charities in the management section of the survey.

There are obviously numerous benefits to having clear strategic goals but sometimes this gets subsumed by the day to day work of an organisation. At a recent conference when presenting on this subject I asked the room how people had started a business plan and never finished one. About ¾ of the room (including me) raised their hands.

There are different strategies you can have, and whilst there is no right or wrong way, we would recommend the structure in the diagram below.

The organisational strategy sits at the top and the business plan and budget details how this will be delivered year to year. It is important that the fundraising strategy underpins the business plan and not the other way around i.e. you raise money to deliver your strategy, and don’t raise money and then consider what you can deliver.

Below is a simple 10 point plan which will help you with the process of developing a strategy and business plan:

  1. Get the team together

Gather views and opinions far and wide. Think about who will be involved in delivering the plan, getting them involved will be a great way to empower them to help deliver it.

City Bridge Trust have gone through a really engaging and interesting process during their strategic review which you can see here including some excellent blogs by Sufina Ahmad who ran the process.

  1. Define the process

Why are you doing this? Who is responsible for producing the plan and who will be responsible for delivering various areas of it? Think about timescales, processes and any outside help you might need.

  1. Set the mission

Now set the overall direction of travel and make sure this aligns with your charitable objectives. What is your overarching objective for your organisation over the next 3 to 5 years?

  1. Explore the current situation

Think both internal and external. A SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) is a good way to think of both sides, and the good and the bad.

Also look at the need for your work and your beneficiaries. Has this changed? Do you need to adapt?

When considering external drivers, the Facing Forward report from Lloyds Bank Foundation asks how charities can adapt to survive and considers the ten trends to watch (ranging from technological changes to Brexit) and also gives tips for charities when preparing for the future.

  1. Set the goals to reach the vision

Put together SMART (Specific, Measurable, Accountable, Realistic and Timebound) objectives to deliver against the mission. The majority of these should be focussed on your charitable work with one or two focussed on your organisation in areas such as finance, governance or workforce.

  1. Activities

Now it is time for a little more detail. How will you deliver these objectives? What are the specific tasks and activities which will help you achieve them?

  1. Gap analysis

What are you missing? Are there areas you should be covering? Do you need more resources to deliver this?

  1. Financials

Probably a whole blog in itself but this plan can be used to develop a detailed budget (including full cost recovery budgets for projects) which can then be used to develop the income generation plan

  1. Risks

Risks will underpin a lot of the areas above so ensure you have considered both their likelihood and impact. You can then look at what you will do to address these. There is excellent guidance on risk management from the Charity Commission here.

  1. Monitor and review

Now you have written the plan (!) make sure you have a process to check against it. It should be a ‘living document’ and updated against the situation going forward.

Hopefully, this will help with the process. There is no right or wrong structure for a business plan or strategy but if you cover all of these points we believe you will have considered everything you need.

Interested in finding out more? Come along to our heavily subsidised face-to-face training or check out an online learning opportunity http://www.thefsi.org/services/

Alex Hayes is the Consultancy and Development Manager at the FSI and works with small charities around the UK to develop strategic and business plans. For more information see here or contact him on alex@thefsi.org.

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