Term Project – Social Enterprise Business Model Development
Overview
Students (in groups of 3 to 4) will develop an “investment quality” business model and investment pitch deck for a social venture as the major project for the course.
The various components of the business model will mirror the content presented in the individual lectures, and students are expected to draw on the readings, lecture content and information provided by guest speakers to inform and guide the development of their business model.
The major project is not simply an academic exercise; rather, by the end of this course, students will have the opportunity to present their business model to two panels – one with “social investors”, and the other with Angel investors.
Each group will be expected to have developed a compelling case for the development of their social venture. To achieve this, students will address the range of operational and strategic issues relevant to the feasibility of the social enterprise, including marketing, legal, financing and other considerations.
To ensure that the appropriate guidance and feedback loops are in place, a number of deliverables are due at various points throughout the term (outlined in greater detail below). Students may also consult the instructors as required for additional clarity or feedback on any of the key milestones.
Objectives
- Practical application of the theoretical concepts discussed in the course
- Understand the tensions that exist between business and social objectives
- Build a feasible and executable business model for a social venture
Deliverables
Note 1: the grading guidelines for each deliverable will be provided in more detail at least two weeks before the due date for each assignment
Note 2: all the deliverables below are due via email by the beginning of the classes in which they are due (unless otherwise indicated). Instructions for submitting assignments can be found in the course syllabus.
The key deliverables for the term project are as follows:
- Motivations, drivers, and business model canvas (10%) (Note: this deliverable will be broken into the “revenue” side and “cost” side of the business model canvas, and each component will be worth 5%)
- Assessment of the business potential of the idea (15%)
- Marketing, organizational, financial and legal considerations (15%)
- Completed business model and investment pitches (30%) (15% for social investor pitch, 15% for Angel investor pitch)
Grading
You will be assessed on the following:
- Your understanding of each of the elements of the business model canvas (e.g. do you have a clear understanding of who your customer is, what value you are providing to your customer, and how you plan to deliver that value to your customer?). We want to know not only that you understand each of the components, but the relationships between each component.
- Your ability to convince others that you understand your business model. (e.g. do you know your business well enough for an investor to want to invest in the business?)
Step 1: Group Members Identified (Due by Midnight, Monday, September 19– no grade assigned)
Students will self-select into groups, with group sizes between 3 and 4 members (depending on class size).
We expect an email from each group – one member of the group will email both Karim and Norm, and will cc all group members. List the full names of all your group members in the body of the email.
We will respond to each group and assign a group numbers accordingly.
Step 2: Social Venture Idea Identified (Due by Midnight, Monday, September 26– no grade assigned)
The goal of this step is to get you thinking about your social venture early in the course to give you ample time to properly model and pitch your idea.
Note that the social venture idea may change once you start business modelling. This is a natural outcome of the business modelling process. If this happens, email us to let us know.
We expect an email from each group (again, emailing both of us and cc’ing each group member). The email will include:
- A one to two sentence description of the idea (i.e. what you intend to do)
- Outline the social issue you are addressing (and what type of “social benefit” you will incorporate into your business)
- Your preliminary thoughts on the business model, including potential target market/customer, and key considerations for the venture (e.g. the financial and social tensions you think the venture may experience)
Note that this is just a preliminary description. You will do more extensive business modelling for your venture, which will be due by classes 4 and 5.
We will provide preliminary feedback on your idea via email by Saturday, October 2, 2010.
Step 3: Motivations, Mission/Vision/Values and “Revenue Side” of Business Model (Due at the start of class 4 (Monday, October 3) – 5%)
Students will describe their motivations for starting their social venture, the mission, vision and values that the social venture will align with, and the revenue side of the business model canvas.
This deliverable will be a maximum of 7 pages (1 page describing the motivations, mission, vision and values of the venture, 1 page with a summary of the revenue side of the business model canvas, and 5 pages (1 page each) detailing the 5 elements of the revenue side of the canvas).
Students will provide a 1-page synopsis of their motivations, and the mission/vision/values of their social venture. Using the Osterwalder business model canvas, students will also provide the following:
- Overview of the revenue side of the canvas (1 page)
- The target market (1 page)
- Explain why you picked this target market over others
- Provide a preliminary demographic profile
- Complete an Empathy Map
- Value proposition (1 page)
- Describe how you plan to create value for customers
- Complete a Utility Map
- Channels (1 page)
- Describe how you plan to provide your value to your customers (e.g. deliver your product/service)
- Relationships (1 page)
- Outline the type and depth of relationships you plan to have with your customers, and how you plan to execute this (e.g. online vs. in-person)
- Revenue streams (1 page)
- Identify the different ways you plan to bring cash into the venture
- Outline your pricing scheme
Step 4: “Cost Side” of Business Model (Due at the start of class 5 (Monday, October 17) – 5%)
Students will describe the cost side of the business model canvas. This deliverable will be a maximum of 4 pages (1 page each detailing the 4 elements of the cost side of the canvas). Using the Osterwalder business model canvas, students will provide the following:
- The key activities (1 page)
- Explain why you picked these activities over others
- Outline the activities you will use to deliver your value proposition (e.g. to execute your “channels” and “relationships” strategies)
- The key resources (1 page)
- Describe the key human, physical, intellectual and financial resources you require to execute your value proposition
- The key partners (1 page)
- Describe the key partners (suppliers, collaborators, others) you plan to work with to execute your value proposition
- Describe how you plan to work with each key partner
- Cost structure (1 page)
- Describe the key costs (variable, fixed) that are required to execute your value proposition
Step 5: Assessment of Business Potential (Due at the start of class 7 (Monday, October 31) – 15%)
Assessing business potential is the next step in business modelling. The key goal is to determine whether the business model you’ve outlined actually has the potential to turn a profit. A guiding question students can ask themselves is, “how do I know that my assumptions in the business model are accurate?” In other words, this is the research and analysis phase of your project.
This deliverable will be a maximum of 10 pages.
Students will use the tools and frameworks presented in class to research the business potential of their social venture. Students will:
- Analyze the target customer (who are they, what are their behaviours and priorities, what is their need/”pain”, what is their willingness to pay)
- Analyze the market (how big is it, where is it, what does it look like, is it an attractive market, what are the entry barriers/substitutes/etc, what is the growth trend)
- Analyze the competition (who are they, what is their ability to satisfy customers’ “pain”)
- Analyze the risk (what could go wrong, what is the impact if it did go wrong, what can you do to prevent it)
Step 6: Marketing, organizational, financial and legal considerations (Due at the start of class 9 (Monday, November 14) – 15%)
The key goal is to figure out, in detail, the key considerations that you must account for when planning your venture. These considerations are often what investors and funders look for when making investment/funding decisions.
This deliverable will be a maximum of 4 pages (e.g. 1 page for each consideration).
Students will use the tools and frameworks presented in class to identify their key considerations for their social venture. Students will:
- Determine marketing strategies (what are the pricing/promotion/distribution strategies, why these strategies over others, what strategic alliances are necessary)
- Determine the organizational infrastructure (HR requirements (including the management team), overhead requirements, governance requirements, key competencies necessary, decision making processes)
- Determine legal considerations (what legal structure will we use and why, what legal framework must we operate in)
- Analyze the financial model (what are the projected revenues, expenses and margin, what is the up-front cost, where do you plan to get your financing from, what are the “best”, “worst” and “realistic” financial scenarios)
- Determine the “exit” strategy
Step 7: Completed business model and investment pitches (Due dates below, 30%)
Students will incorporate their business potential research and key considerations into their business models, and will develop two investor pitch decks – one targeted to “social” investors, the other targeted to business-oriented Angel investors.
The timelines for this aspect of the term project are as follows:
- Final business model – due at the start of class 10 (November 21)
- Social investor pitch deck – due by midnight, Saturday, November 26
- Angel investor pitch deck – due by midnight, Saturday, December 3
The final business model to be submitted will follow the same format as that outlined in steps 3 and 4 (above). Therefore, the business model to be submitted will be a maximum of 11 pages.
The details for the two pitch deck presentations will be provided closer to the due date.
Additional Information
As this course is meant to be as practical as possible, students are encouraged to seek assistance from both Norm and Karim throughout the course. If you come to us with questions or a draft of your work before an aspect of the assignment is due, we will provide constructive feedback and can direct you to additional resources.
Students are also encouraged to review the additional tools and resources found on socialentrepreneurship.ca
Students should also note that the Angel pitch is both an academic and a practical exercise. Should the Angels be interested in your idea and you are serious about implementing your social venture, the Angels may invite you to submit a proposal for investment. Any potential offer is separate from the requirements of the course, and an offer or lack of offer will in no way be reflected in the final grade you receive.