4.5.2 Business plans

All time-bound offer documents should be supported by a business plan that makes the case for the investment project. The business plan should normally be freely available to the public via a website and contain sufficient information and evidence for an independent professional assessment of the business case for investing in the society. Business plans should address some or all of the following matters, in proportion to the scale of the investment project:

  • Purpose and objectives: the purpose and objectives of the society; summary of its origins, history and track record to date
  • The investment project: capital required and how this capital will be used; valuations, assessments, terms and conditions affecting any major assets to be acquired; planned sources and costs of capital
  • Proposed trading activities: description of trading activities; manager competencies; staffing plans; market analysis and marketing plans; member engagement in trading activities
  • Financial forecasts: cashflow forecasts; projected balance sheets and profit and loss accounts covering at least the first three years of the investment project
  • Funding mix: sources of capital available to the society, including community shares and institutional investment in the form of grants, debt and equity. How the funding mix relates to the fundraising targets and contingencies for the share offer
  • Share offer: fundraising targets, timetable, contingencies, terms and conditions, and share liquidity provisions; tax relief (if relevant)
  • Risk analysis: identification of the key risks facing the investment project, and plans for mitigating these risks
  • Governance: access to the rules of the society; explanatory notes for these rules;  details of the management committee composition and competencies
  • Community engagement: profile of the community targeted by the offer document; community engagement activities to date; evidence of community support; plans for promoting the offer.

The public availability of a supporting business plan means that the time-bound offer document can concentrate on communicating with unsophisticated investors, who can, if they choose, seek independent financial advice.

If you have any questions or suggestions for new information you would like to find in the Handbook, contact the team by email at communityshares@uk.coop