Key Steps to Starting a Social-Enterprise Venture

7. Costing analysis — costing, financing and unrelated business income tax (UBIT)

• Define costs — direct, indirect, variable, fixed, start up and recurring.
• What is the break even point — profit margin?
• Explore financing options from banks, nonprofit lenders and foundations.
• Look into UBIT (see IRS Publication 598) — It must be paid if your social enterprise is a trade or business, is regularly carried on, and is not substantially related to furthering the exempt purpose of your organization. Block and Gleason recommended getting professional advice at this stage in the planning process.

8. Sales planning
Elements in a sales plan include:

• Customer profiles — buyer and end users.
• Market positioning
• Distribution methods — How will you reach customers and end users?
• Pricing — High price vs. budget price, and sales volume issues.
• Promotion — How will you tell potential customers and end users about your social enterprise?

9. Write a business plan, pulling everything you've learned into one document.

• How does the venture support your mission?
• What are mission and dollar goals for the venture?
• Describe the target customers and end users.
• What customer needs are addressed?
• What will motivate customers to buy into your venture?
• Define your competition and your competitive advantage?
• Come up with a pricing strategy.
• Devise a promotional strategy.
• What are the startup costs?
• What are the ongoing venture costs?
• What are your annual financial projections?
• What financing is required?
• How do you plan to repay financing?

For more information on social enterprise ventures, read our June cover story, "Safety Line."