Business planning and costing projects

Business planning

Applications proposing income-generating ventures are greatly strengthened by the provision of a business plan.

The headings below are not an exhaustive list but are characteristic of sound business planning. It is useful if you include the following within your business plan, for submission alongside your application.

Objectives:

• statement about why your organisation is developing this income-generating venture.

Purpose:

• Be as specific as possible.
• Summarise the business and the product or service provision clearly.

Market - show that you understand:

• its size
• the factors that influence it
• your target customers.

Will your business:

• rely on mass demand
• the factors that influence it
• provide specialist products or services to niche markets?

Competitors:

• Who are your competitors?
• What are their strengths and weaknesses?
• Provide specialist products or services to niche markets?

Marketing:

• How you will market your product or service?
• What methods will you use?
• Will this change as the venture develops?
• How will you monitor the effectiveness of your marketing approach?

Sales targets:

• month-by-month and year-by-year.

Resource requirements needed to support your sales forecasts:

• premises
• equipment
• staff
• expertise
• licences etc.

Financial requirements and forecasts:

• How much money do you need and for what?
• What financial resources are already available?

Projections should include:

• detailed cashflow forecast showing predicted income and expenditure
• profit and loss forecast and balance sheet forecast for the first three years of the venture
• an analysis of what you will need to do to break even and a sensitivity ('what if') analysis are also helpful.

Management:

• Describe the responsibilities and key skills of all staff.
• Show how you will manage the performance of:
  • the venture
  • the staff.

Business risk:

• Identify risks.
• Set out how the risks can be minimised.
• Be realistic about what could go wrong.

Download more comprehensive guidance
A guide to business planning by David Irwin (PDF - 144k)

Costing projects

Many charities and not-for-profits separate their so-called 'core' costs and their project costs and fundraise for each separately.

In many cases, however, core costs are not the costs of providing a core service but are really overhead costs. Ideally the overhead costs should be spread fairly over all of the projects, so raising funds for the project will also ensure that all the overhead costs are covered.

David Irwin, an independent consultant, has produced a guide on behalf of Esmée Fairbairn Foundation that explains how those overhead costs can be fairly apportioned.

Download Costing projects and programmes in the voluntary sector report
(88k - PDF)

If you have any feedback on this report, please email us.

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Download more guidance

A guide to business planning by David Irwin (PDF - 144k)

Costing projects and programmes in the voluntary sector report (88k - PDF)