Social Enterprise Town Hall Meeting

Social Enterprise Ventures LLC

socialenterpriseventures.com 1

Charity? or

Mission-Driven Business?

Getting Started on Social Enterprise

Presented by Jean Block and Randy GleasonSocial Enterprise Ventures, LLC



What is Social Enterprise?

It is unrestricted renewable income that creates the path toward sustainability and enhances your mission.

It is generated through sales, payment for services or other business opportunities.

It is yours to use as your organization sees fit.

It builds upon itself and earns more.

It should not replace fundraising – it is a new tool in your organizational tool kit.

More money = more mission!



Traditional Funding

Grants, special events, donations, sponsorships, underwriting, etc.

You work hard to get it, use it up and have to go back for more.

There are strings attached: grantors require reports to ensure you have met their funding requirements, donors at a special event want to have a good time, enjoy the food, etc.

Traditional funding is usually restricted in some way.



Myths about Social Enterprise Nonprofits can’t make a profit. You do now –

you just aren’t paying taxes on it!

It’s a quick fix – We can do this tomorrow.

If we earn money, we will lose our nonprofit status – Nope. Not likely.

What if we have to pay tax? Well, what if?



Why Consider Social Enterprise?The funding marketplace is changing: Corporate giving is now directed toward investing for

the long term rather than buying tables for one night! Government funding is diminishing and being

redirected. Donors are tired of giving to organizations that operate

with a poverty mentality. What does this change mean for your organization? It means a shift to earned income instead of relying on a

'hand out."

Nonprofit is a tax designation, not a business plan!



And….

Remember the definition of insanity…

If you want things to change in your organization, you will have to invest in a change process!



Assessing Organizational Readiness Board and Staff are willing to invest in change from

charity-think to sustainability!

Board and Staff are open-minded.

Board and Staff create a dedicated team to learn social enterprise.

Ensure that every member of the team is committed to the journey.

Board and Staff are willing to invest the time and dollar resources into learning social enterprise.



Typical Outcomes Fundamental and systemic changes in the way you manage

your nonprofit business. A business plan for an earned income social enterprise

venture.

Enhancement of current programs and services by providing value added benefits that create new income sources from new payer markets and customers.

A new objective method by which to evaluate current and future programs, services and income opportunities.

A new language.



Burning Questions? Ask Randy now!



What is Involved?

We have learned that seven basic skills are involved in the journey to become a successful social

entrepreneur.



Start With a Common Understanding of the Basics

Organizational Focus

Mission, Vision and Core Values - The groundwork for social enterprise.

Internal and External Forces - What motivates your organization to develop earned income?

Mission and Dollar Goals - How will you measure success?

Stakeholder Communication - Who are they? What are their concerns? How will you communicate with them?

This is the beginning of market research.



Build an Inventory of Assets

Core Competencies – What you do extremely

well (e.g. your products and services). Physical Assets – What you have that is

underutilized. Technical and Knowledge Assets – What you

know (e.g. training). Relationship Assets - Who you know that can

help with social enterprise (e.g. people with influence).



Set Objective Evaluation Criteria

Set parameters to evaluate potential earned income opportunities.

Narrows the field to serious potential opportunities.

Prevents WHO HOO!



Brainstorm OpportunitiesLeverage your assets into earned

income.

Service Opportunity - Delivers a service to a market that you currently serve or a new market: A human service agency bundles current and new programs for seniors, marketing to their adult children and caregivers.

Knowledge Opportunity – Delivers your knowledge to a current or new population (nonprofit or for-profit): A nonprofit training agency develops training programs for small businesses, increasing training revenues by 50% in the first year.

Product Opportunity - Produces or delivers a tangible product: A food bank expands its product line to include non-food items.



Brainstorming…

Employment Opportunity - Provides direct employment to current or future customers or clients: An agency serving persons with disabilities expands its greenhouse program into the organic market.

Unrelated Venture Opportunity - Takes advantage of underutilized assets or develops an opportunity unrelated to your asset inventory: An agency holds an on line auction in partnership with a for profit business.



Evaluate Opportunities

Rank and score the opportunities. Use objective criteria. Select those with highest initial potential to

reach mission and dollar goals.

Begin Market Research & Feasibility.



Market Research & Feasibility

Venture Market Research Part 1 :The Customer(s)

Introduction to Market Research Market Push vs. Market Pull Market Trends Target Market Planning Target Markets:

market size buyers vs. users buyer motivation buyer profiles features and benefits



…a quote about research…

“You were right regarding the idea versus the results of the research. We found that the market we thought was interested really was not or already had the need taken care of. It's teaching us the value of research and continuing to dig deeper on our ideas. Most of all, it's showing us to follow where the research leads.”

Zack Wilson, PR/DevelopmentHigh Plains Food Bank, Amarillo Texas






Competitive Analysis

Venture Market Research Part 2: The Competition

Direct Competition Indirect Competition Competition’s strengths and weaknesses Market Differentiation – How will you

compete?



Costing AnalysisCosting, Financing and UBIT

Defining costs - direct, indirect, variable, fixed, start up and recurring.

Break Even Point - Profit Margin. Explore financing options from banks, nonprofit lenders,

foundations.

Definition of UBIT – IRS Publication 598 It is a trade or business, It is regularly carried on, and It is not substantially related to furthering the exempt purpose

of your organization. Get professional advice at this stage in the planning process.



Sales Planning

Elements in a Sales Plan

Customer Profiles – Buyers and End Users. Market Positioning – Jaguars or Chevrolets? Distribution Methods – How will you reach customers

and end users? Pricing – High Price vs. Budget Price – sales volume

issues. Promotion – How will you tell potential customers and

end users about your social enterprise?



Write a Business PlanPull everything you’ve learned into one document: How does the venture support your mission? What are mission and dollar goals for the venture? Describe the target customers and end users. What customer needs are addressed? What will motivate customers to buy your venture? Define your competition and your competitive advantage. Pricing strategy. Promotional strategy. Start up costs. Ongoing venture costs. Annual financial projections. Financing required. Plan to repay financing.






Examples of Social EnterpriseNew Uses/Markets for Existing Physical

Assets An agency serving persons with disabilities opens their

evening/weekend respite home to drop in day care. A residential program takes over management of its homes

from HUD, reducing overhead and transferring the financial gains to its own programs.

An agency serving persons with disabilities expands its greenhouse program into the organic market.

An agency revamps its thrift store to attract a higher-end market, adds special programs and services for that market.

An agency remodels ineffective space, adds general support services and rents space to small businesses and other nonprofits.

An agency opens its camp to corporate and private users.



Examples of Social EnterpriseNew Uses/Markets for Technical/Knowledge

Assets An agency opens its training classes to other agencies whose

staff need required training. A human service agency bundles current and new programs

for seniors, marketing to their adult children and caregivers. A food bank expands its product line to include non-food items. A counseling agency develops continuing education credit

programs for psychologists and counselors. A nonprofit training agency develops training programs for

small businesses, increasing training revenues by 50% in the first year.

An advocacy agency expands its annual awards banquet to include a statewide conference.



Examples of Social EnterpriseNew Ventures

An agency takes over management of its car donation program, previously operated through an out-of-state for profit company.

An agency holds an on line auction in partnership with a for profit business.

An agency providing services for persons with disabilities opens a coffee kiosk, employing clients.



…and a quote…"During these challenging economic times

Casa Esperanza has had to face the hard truth that our faithful regular funders are unable to fund at past levels - sometimes not at any level. If it were not for our Give Hope a Ride vehicle donation program, Casa Esperanza could not continue the excellent programs and services for our guest families.

The time and money our social enterprise team invested in training four years ago has certainly proved to be well worth it!"

Eileen Casey Cook, CEOCasa Esperanza, Inc. & Casa Esperanza Foundation,

Inc.



…another quote

“The Social Enterprise Workshop helped the Amarillo Family YMCA focus more on building a solid business plan for our existing enterprise (membership) based on the wants and needs of our clientele. The stakeholder, member and community surveys were true eye openers as to what our clientele really wanted. We used those suggestions to build an enhanced membership program called Fitquest which we implemented and began marketing in December 2008. Our membership numbers have begun steadily growing and the response from the new participants has been very positive.”

Debbie WrightPresident, CEO, Amarillo YMCA



Expedition© Training Program



What Does Training Involve?

A team of agency Staff and Board (5-12 is best)

Several agency teams trained at the same time.

Seven basic modules of classroom training with consultation and guided homework over about 6-9 months, usually in 4-7 sessions.

A comprehensive workbook. Consulting for up to one year.



What Does Training Cost?

Our Expedition training costs $12,000 per agency, regardless of the size of your team. It includes

the seven classroom modules, guided homework and consultation up to one year. That's only $1,000 per month to invest in

sustainability !

Here’s an Idea: Learn it and Earn it!Use Expedition as an earned income venture for

your organization. Become a trainer and pay SEV a licensing fee per group trained.

Visit www.socialenterpriseventures.com for more information.



Let’s Talk! For a copy of this presentation, email

[email protected]

Want to Learn More? www.socialenterpriseventures.com 1.888.647.2392

Announcing our newest training! Exploration – Management by

Assessment. Benchmark your organization against best

practices in 7 core areas.