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Business planning

To take on and successfully run an asset, your organisation must have a business model that works.

When applying for a Community Asset Transfer, your organisation will need to demonstrate that you can generate enough income to cover the costs of operating and maintaining the site.

A business plan will help you do this, as it will outline where you are now, where you want to be, and how you will get there.

A detailed plan will also help your organisation demonstrate that you’re well positioned, governed, financially viable and can operate an asset successfully. 

The main sections of a business plan include:

  • an overview of your organisation, including who you are, where you’re located and the individuals in positions of responsibility
  • information about your organisations including your purpose, vision, mission and aims
  • your current position, including how your organisation is structured, any assets, your offer, your membership, your workforce, and your role in the community
  • an environmental analysis, including a SWOT analysis
  • targets and action planning
  • financial planning, including income and expenditure forecasts and cashflow. More information on this can be found below. 

A business plan should be easy to read and understand and sell your case well. Here's a template business plan and financial workbook.

There are consultants who can help with business planning, who can be useful as a critical friend, and take the pressure off volunteers and staff.

However, if your business plan is created by someone outside of your organisation, make sure that your project team understands the plan and what it means for you in terms of managing the asset.

  • Forecasting income and expenditure

    As part of your business plan, you’ll need to include income and expenditure projections over a three-to-five-year period. 

    Forecasts are always estimates but should be based on real figures where possible; access to historic income and expenditure figures from the local authority or previous operator, your own income and expenditure accounts or quotes and figures from similar-sized organisations and facilities can help.

    Other top tips when forecasting income and expenditure include:

    • Assume income will be lower and costs will be higher than you hope.
    • Plan for the additional costs of a Community Asset Transfer.
    • Your income and expenditure will be dependent on your legal structure. For example, if you’re set up with charitable status, you may benefit from different tax reliefs.
    • Be sure to include all different income streams, including membership fees, facility hire, sponsorship, fundraising, and interest.
    • Differentiate between capital and revenue costs. Capital costs relate to physical assets, large scale equipment or any professional fees related to buildings costs, while revenue costs are the ongoing cost of running your organisation and the asset.
    • Remember to build in inflation.
    • Always include contingency costs for essential repairs, maintenance, and replacement.
    • Don’t forget additional staffing costs like training, expenses and any tax or pension contributions. 
    • Be sure to include contributions towards lifecycle costs (how much it costs to keep an asset open and fit for purpose during its lifetime) and a sinking fund (money that can be used to repair or replace facilities or equipment at the end of their useful life).
    • Include a sensitivity analysis, which evaluates how increases in expenditure or decreases in income will affect your overall balance, enabling you to prepare for these scenarios. 
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  • Cash flow

    Cash flow is the way money flows in and out of your bank account and demonstrates if you’ll have enough money each month to pay regular expenditure such as utility bills, insurances, maintenance costs, and staff wages. 

    It’s important that any projections for income and expenditure are also put into a cash flow statement for the first three to five years of the asset transfer.

    Organisations and businesses often fail due to problems with cash flow rather than their overall profitability, especially where new assets are developed and the costs of the asset need to be met before any increase in income is realised.

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  • Condition and maintenance liability

    It’s common in Community Asset Transfers that leases from the local authority will contain a ‘full’ repairing obligation, which requires the lease holder to return the premises in good repair (often at your expense), regardless of whether the asset was in a relatively poor condition at the start of the lease. 

    As detailed earlier in 2E, remember to assess the status of the asset, whether you need to negotiate improvements and be clear on the condition that the asset will be in before any transfer takes place.

    Even if the asset is in good condition at the time of transfer, it’s important to put aside funds each year for future repairs and refurbishment. 

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  • Risk register

    In addition to a business plan, a detailed risk register is also vital in helping your organisation demonstrate to a local authority that you’ve thought through all the possible risks associated to the running and management of an asset and put actions in place to minimise their impact. 

    A risk register is separate to a risk assessment produced for the activities you deliver.

    You should assess the likelihood and the impact of each risk and the actions you will put in place to address them.

    Organisational risks may include increased costs, ongoing maintenance responsibilities, health and safety, safeguarding, HR, and governance. 

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