How I wrote a plan for my social business – Tessa Holladay, SAINT LUKE
We love seeing startups doing well, by doing good and we've helped to fund many businesses that are packed with social elements. But, as a social entrepreneur how do you give confidence to lenders, investors and customers that at the heart of what you're doing is a sustainable business? One entrepreneur we recently funded is Tessa Holladay, founder of SAINT LUKE a London-based startup that makes travel bags. Every bag sold pays for the resources to provide 40 people in developing countries with clean water for up to five years. Here's her advice for creating a brilliant business plan for a social business.
"SAINT LUKE was built from the top down. We knew what we wanted our brand to represent: we wanted our customers to be hit with "holiday good vibes" when they bought a product – that excited feeling you get on the way to the airport, that first dip in the pool, the first glance at the sea, the first sip of local beer, and that smile on your face.
We also knew we wanted to make a difference. And we knew that in giving - whether a present to a best friend, or a donation to someone who so desperately needs it – feels intrinsically good.
Why not combine the two to make something really powerful?
While we got a lot right when we started, we also made mistakes. As I planned to self-fund and because I had a background in finance, I persuaded myself that we didn’t require a formal business plan. However, much like the tip of an iceberg, it was shortly after launch that we realised the challenge we'd taken on. Delving into the details of how were going to make this dream a reality meant global sourcing, sophisticated forecasting and complex supply chain management - so it was pretty soon after launch that we realised we needed some help. I knew Virgin StartUp would be a great place to start, so we downloaded the business plan and got to work.
I created a set of key objectives that I wanted SAINT LUKE to achieve and kept coming back to them in the business plan. My advice to anyone starting a social business would be to do the same, because it helps to make sure you reflect the true purpose of the brand in everything you do. Here are some ideas based on my experience that might help you to do the same thing:
Define your style of “making a difference”, and put it at the front and centre of your brand. Sell the whole package, not just as an afterthought! Making it part of the lifestyle, including it in your key objectives, your mission statement, and considering it in all decision making will help ensure it remains central to the brand and relevant to your customers. Additionally, by focusing on a deeper purpose, a conscious business inspires, engages and energises its stakeholders. Employees, customers and others trust and even love companies that have an inspiring purpose.
Be specific (and ambitious!) about what you want to achieve – is your mission to ensure everyone in the world has access to clean water? Or to provide access to medical care for pregnant women around the globe? How can you tie this in with your branding? Try to make sure the cause you’re supporting is relevant to your business. For example, SAINT LUKE is all about travelling and feeling good; Waves For Water (who we collaborated with) not only support a cause that we’re truly passionate about, it was also founded by a group of surfers with very similar values to ours. Their motto is, “Do what you love and help along the way”, which we love!
Remember you’re still a business - like any other business, social or other, if you want to make something truly great happen, then you’re going to have to grow. You need to make doubly sure that you’re giving the right amount to your cause while making certain you still have plenty of margin spare to grow. In our case, by using quotes from suppliers and factories, we were able to accurately break down how much products were going to cost, how much we could sell them for and how much we would be able to contribute to our cause per item. This is a crucial point for any social entrepreneur – you must strike a balance between giving and creating profit in order to grow and expand. Profit is often regarded as an ugly word, but it’s vital for expansion and ultimately will allow you to support more great charitable causes, making an even bigger difference.
In the words of Ed Freeman (Business Professor and Conscious Capitalism, Inc trustee), “We need red blood cells to live (the same way a business needs profits to live), but the purpose of life is more than to make red blood cells (the same way the purpose of business is more than simply to generate profits).”
And lastly: get some support! We needed extra finance, experienced advice and a strong support system: and this is why we approached Virgin StartUp for a loan. In the end, it was the process I went through together with Virgin StartUp along with the coaching they offered that proved every bit as valuable as the cheque."