Financial and Business Planning
One of the most important tasks as you develop your coop will be finance and business planning. This is needed for
- Yourselves - so that you are clear about all the costs you must meet and how much income you are likely to generate. This is essential so that you can be confident you have a realistic business model
- For funders who will want to be happy that they are investing in a well run organisation
- For a community share offer, as you must be able to show potential investors that you are a viable business
A copy of the CCCV business plan, produced for our community share offer in 2020 is here. You will see that the business plan includes all aspects of operations and management not just financial information.
A template financial planning spreadsheet is here (tba)
Our template covers all major items of expenditure. You will need to base your assumptions on local conditions - costs of e.g offices and transport will vary according to your location. The template includes the items you will need to budget for and an outline of assumptions
This is often a challenging task - especially for those who have had little business experience. Getting input from people with experience of delivering social care at this stage is crucial to ensure that your assumptions are realistic and that you have not overlooked anything. When our Registered Manager joined us she challenged the basis of our plans based on her experience and it was substantially reworked. Her knowledge helped us understand how many staff were needed to deliver a care package, with a realistic rota and time for holiday, training, sickness etd. You also need to have the flexibility to cope with changes e.g. Covid meant that more PPE (personal protective equipment) is needed, and increased its price due to shortages.
There will be tensions between aspirations and financial reality. People want to set up a care coop to improve current provision - especially in staff terms and conditions and quality of service. Trade offs may need to be made as e.g. increasing wages may result in user charges that are above the local authority rate, and risk making your services only available to the well off. There will need to be negotiation and compromise between more hard headed business needs and the concern for community benefit that is the motivation. Our aspiration was to offer all staff predictable full or part time hours, but this was not possible in the early days, when we did not know how many care hours we would be delivering.
You will need to allow for a start up period of up to three months when you will incur substantial costs in rent and wages, but will not yet be delivering care. It is essential to have staff in place, and to train them in order to be able to advertise your care service. To cover the shortfall you will need grant funding, community shares, or loan finance.