Business Planning

Pact’s business plan methodology fosters process ownership, organization-wide participation, and active learning. Through a set of diverse techniques inspired by the learning-by-doing approach, participants engage in creative thinking, individual reflection, collective synthesis, and consensus-building around income-generating initiatives.

Among the different strategies available to advance organizational sustainability, the development of income-generating activities stands out as one of the most robust and high impact. This strategy, when operationalized through a systematic business planning process, fosters social entrepreneurship, better management practices, and new ways to fulfill the organization’s mission.

Income-generating activities developed through business plans result in increased financial impact, quality, and viability. Business plans permit organizations to take advantage of demand-supply gaps, develop sound value propositions, create innovative processes, forge ground-breaking market strategies, and minimize the risk of investments. By implementing business plans, development organizations have discovered new skills and capacities, found innovative ways to serve their target population’s needs, and created novel income streams to support their own sustainability. In short, business plans maximize the likelihood of success in income-generating initiatives by blending entrepreneurial spirit, organization’s mission, and market opportunities.

Pact has supported dozens of development organizations (NGOs, CBOs, networks, etc.) working in different countries and sectors to design and implement successful business plans. Projects developed include internet cafés, training services, grocery wholesalers, small farms, bookstores. In all cases, the business initiatives have emerged from the local organizations’ expertise, a promising business opportunity, and committed leadership to ensure long-term sustainability.

Pact’s Business Plan Framework
The ultimate goal of a business planning process is to create a continuous, expanding flow of funds to support the financial needs of a development organization. To do so, Pact’s business planning approach addresses the following topics:

• Business Opportunity and Value Proposition; identifies the main characteristics of the business initiative and defines a compelling proposition geared towards the solution of the identified need.
• Competitive Analysis; examines the pros and cons of the business initiative within the context of key market forces: clients, suppliers, competitors, substitutes, and barriers to entry.
• Market Assessment; analyzes the current and future market situation in relation to product or service features. Special attention is paid to the perspectives of clients and competitors.
• Marketing Plan; comprises pricing, positioning, promotion, product or service development, and distribution according to market opportunity and business approach.
• Operations Plan; sets out the phases, procedures, and technologies required to generate the product or service and to create a competitive advantage.
• Administrative & Legal Plan; defines the organizational structure, staffing characteristics and functions, and legal requirements that need to be addressed.
• Financial Plan; determines the total investment (fixed assets, intangible assets, and working capital), sources of funding, revenue, costs, and financial results under different scenarios.

Methodology
Generally, three phases make up the business planning process: a) Readiness (development of entrepreneurial skills and business concept identification), b) Training (workshops and coaching activities), and c) Accompaniment (technical assistance for business plan completion). Pact’s Business Plan Methodology uses:

• Dissemination of relevant knowledge resources to contribute to skills development
• Development of customized questionnaires and templates
• Participatory presentations on the concepts and tools discussed during workshop sessions
• Working groups that stimulate reflection and knowledge sharing
• Plenary sessions for discussion and technical assistance

Outcomes
Through Pact’s business planning facilitation, development organizations identify and design business initiatives. In addition, key staff are trained to manage and follow-up the implementation of business plans. Overall outcomes derived from a business planning process are:

• Business plan – Detailed proposal
• Developed capacity on income-generating activities
• Improved financial sustainability
• Transfer of tools and techniques

For further information, contact: Guillermo Rivero | grivero@pacthq.org | Tel.: 202-466-5666 | Fax: 202-466-5669