Team, Structure and Risk

Investors and funders often say they back people as much as ideas. A strong team with a modest idea will usually do better than a weak team with a brilliant one. This lesson covers three sections of your business case that together answer a simple question: can these people, in this structure, manage what could go wrong?

The Team section

The Team section shows who will make the enterprise work. Describe:

• The leadership. Who will lead the enterprise day to day, and what experience they bring.
• The board or governing group. Who will oversee it, and how they represent the owners and the community.
• Key staff. The roles you need at pilot and at launch, and whether they are filled.
• Advisers and partners. People and organisations who bring expertise you don’t have in-house, such as an experienced operator, an accountant, a lawyer or a technical adviser.
• Gaps and how you’ll fill them. No team is complete. Be honest about what’s missing and how you’ll find it, whether through hiring, training, mentoring or partnership.

Short profiles work best: a few lines for each person, focusing on experience relevant to this enterprise. Readers don’t need full résumés in the main document. Put those in an appendix if needed.

Local jobs and skills

For a community enterprise, the team is also an outcome. Describe the roles, training and progression available to local people. Agree realistic recruitment and training commitments with the people and organisations involved, and budget for supervision and learning time.

The Unique Structure section

The Unique Structure section describes how the enterprise is owned and governed, using the choices you made in Lesson 5.3. Explain:

• the legal structure, such as a Nation-owned corporation, co-operative, social enterprise or partnership
• who owns it and how decisions are made
• how profits will be used
• how the community benefits and is kept informed
• any agreements with partners, and what they cover

This is where your enterprise can stand apart. A structure that keeps ownership and benefits at home, like a community forest’s legacy fund or Shorefast’s model on Fogo Island, is often what makes a community enterprise compelling to funders and partners.

Keep this section factual and clear. Readers want to know who controls the enterprise and where the value goes. If you’re still finalising the structure, say what you’ve decided, what’s still open and when it will be settled.

The Risk section

Every enterprise faces risks. A business case that pretends otherwise loses credibility. A business case that names its risks honestly, and shows how each will be managed, builds trust.

Risks usually fall into several groups.

• Supply risk. Inputs may be less, less reliable or dirtier than expected.
• Market risk. Customers may buy less, or pay less, than planned.
• Operational risk. Equipment breaks, processes don’t work as expected, or key people leave.
• Financial risk. Costs run over, revenue comes late, or finance falls through.
• Regulatory risk. Permits are delayed or refused, or rules change.
• Relationship risk. A partner withdraws, or community support weakens.
• Environmental risk. Weather, fire, flood or other events disrupt operations.

Assessing and managing risk

For each significant risk, ask two questions: how likely is it, and how serious would it be? Rate each as low, medium or high. Focus your attention on risks that are both likely and serious.

Then describe what you’ll do about it. There are four basic responses.

• Reduce it. Take steps that make the risk less likely or less serious, such as supply contracts, quality checks or staff training.
• Share it. Spread the risk with partners, insurers or customers through agreements.
• Prepare for it. Have a plan ready if it happens, such as a backup supplier or a cash reserve.
• Accept it. For small risks, sometimes the best response is to accept them and move on.

A simple risk table, with columns for risk, likelihood, impact and response, is clear and easy to read.

Honest limits

You can’t foresee every risk. What matters is showing that you’ve thought carefully about the most important ones, and that you have the team and structure to respond when something unexpected happens. Be wary of a risk section that is too short, as readers will assume you haven’t looked hard enough.