5 introduction to Operations and Finances

Operations and Finance

Pre-Exercise: Think for a Moment

• What did you do today? • Write out the series of major actions you took today • Next to each action, write down what it took to complete these actions • Next to each input, write associated costs


Implementation: Operations & Finance Bringing Your Vision to Life a Step at a Time


Context in the Curriculum

Divergence Convergence Emergence

Inspiration Ideation Implementation •  Visioning & Sharing

Vision •  Environmental

Scanning & Impacting Environment

•  Social Business Models

•  Prototyping & Assessment

•  Operations & Finance •  Volunteer Management •  Pitching and Friendraising


The Tent of Meeting Took Hard Work • The People of Israel needed a place to worship, so Moses develops a new structure: The Tent of Meeting • Moses’s vision is perfect – but he needs to translate that vision into practice.

• He sets people to work through a detailed structure.


The Tent of Meeting Took Hard Work Moses passed on his plans in the following format :

1.1 The tabernacle, its tent, and its covering, its clasps, and its boards, its bars, its pillars, and its sockets; 1.2 The ark, and the staves thereof, the ark-cover, and the veil of the screen; 1.3 The table, and its staves, and all its vessels, and the showbread. (Exodus 35) In modern terms, this plan is a

Work Breakdown Structure (WBS).


WBS: Each Breakdown Breaks Down 1.2 The ark, and the staves thereof, the ark-cover, and the veil of the screen;

1.2.1 Ark and Staves Thereof 1.2.1.1 Walls of Ark (day 1-3) 1.2.1.2 Staves of Ark (day 2-3) 1.2.1.3 Cherubs (day 3-6) 1.2.1.4 Veil of the Screen (Day

4-8) Break each activity into tasks: 1.2.1.1 Walls of Ark (day 1-3)

1.2.1.1.1 Gather Wood (2hrs) 1.2.1.1.2 Hew Wood (4hrs) 1.2.1.1.3 Piece together Wood

(4hrs) 1.2.1.1.4 Cover with Gold (2hrs)


How Does One Plan Operations?

• One plans for operations by creating a workplan.

• A Workplan reflects the activities the venture needs to carry out order to produce its desired outputs. Every activity has required inputs.

• A Budget then takes those inputs and lists the costs and labor hours they require to carry out the activities.

A Good Plan Makes Operations Easy.


First, Detail Your List of Activities

• List activities from social business model, and add as necessary • Break activities into tasks • Order chronologically • Determine timeframe for each


Example: Jewish Kids Groups Work Breakdown Structure

1.0 Volunteer Engagement (Sep-‐Oct) 1.1 Iden3fy poten3al Volunteers 1.1.1 Build a prospects list 1.1.2 Contact prospects in ranked order 1.1.3 Hold informa3on Session 1.2 Select Volunteers 1.2.1 Conduct Interviews 1.2.2 Iden3fy roles and commiAees 2.0 MarkeBng & Social Media (Oct -‐ Nov) 3.0 School Partnerships (Nov – Dec) 4.0 Curriculum Development (Jan – Mar)


Then Get SMART

Your tasks should be:

•  Specific (Can anyone understand them?) •  Measurable (Can you know if it is done?) •  Achievable (Can it be done?) •  Relevant (How relevant is it to success?) •  Time-bound (When does it need to be done?)

• Anyone should be able to understand what needs to be done and how long it should take.


And SMARTer Work Breakdown Structure

1.0 Volunteer Engagement (Sept-‐Oct) 1.1 IdenBfy 15 potenBal Volunteers (Sept)

1.1.1 Build a ranked prospects list of 30 volunteers based on research and referrals (Sept 1 -‐ 8)

1.1.2 Contact prospects -‐ phone & email (Sep 8 -‐ 15) 1.1.3 Hold informa3on session at JCC for one hour, with call-‐in capabili3es (Sept 20) 1.2 Select Volunteers 1.2.1 Conduct Interviews by phone and in person -‐ have your top two volunteers conduct interviews as well (Sept 21 -‐ 30)

1.2.2 Ask for commitments from volunteers (Oct 10) 1.2.3 Assign roles and commiAees (Oct 15)

Phase

Activity

Task


Next, Identify Your Inputs

Volunteer Engagement

Build prospect list Contact prospects Plan & hold info session

Phase:

Activity:

Inputs: Friends & Family

Identify Volunteers

Computer

Internet resources

Intel on community

Tasks:

Phone

Computer, Internet

Data system?

Venue

Food

A/V, materials


Workshop: Build a Quick Workplan

• In groups of three, choose one venture. • Describe the key activities for the first three months. • Identify 3 tasks for one activity • Identify 5 inputs for one task, and note the due date for the task • List each task on an individual post-it.

Build prospect list

Activity:

Inputs: Friends & Family

Identify Volunteers

Tasks:


Walls of Ark Needed Inputs Input Cost

Gather Wood

Worker salary Wood

20 shekel/hr No cost

Hew Wood Worker salary Sawing Tools (saw, workbench, clamps)

20 shekel/hr 300 shekel

Piece together Wood

Worker salary Glue Clamps

20 shekel/hr 15 shekel (paid for above)

Cover with Gold

Goldsmith salary Gold Mold Smel3ng Equipment (tongs, pot, etc)

40 shekel/hr 7000 shekel 300 shekel 500 shekel

How Do You Translate WBS to Budget?


Walls of Ark Input Cost Time

Gather Wood

20 shekel/hr 2hrs

Hew Wood 20 shekel/hr 300 shekel

4hrs

Piece together Wood

20 shekel/hr 15 shekel (paid for above)

4hrs

Cover with Gold

40 shekel/hr 7000 shekel 300 shekel 500 shekel

2hrs

Match Task With the Time It Takes


Lay Out Costs Per Day Inputs Day One Day Two Day Three Total Walls of

Ark budget

Salaries 40 shekel 160 shekel 80 shekel 280 shekel

Equipment 315 shekel

350 shekel 665 shekel

Materials 7000 shekel 7000 shekel


Workbook: Basic Budget Worksheet Goal Needed Inputs Input Cost Time/Units

Task #1 List inputs needed here List cost per unit of input here

List quan3ty of units or amount of 3me here

Task #2 Inputs Cost/Unit Quan3ty

Task #3 Inputs Cost/Unit Quan3ty

Task #4

Inputs Cost/Unit Quan3ty


Elements of an Organizational Budget:

•  Projected income •  Projected expenses •  Categories and line items •  Monthly and annual projections


How Will You Cover Your Costs?

•  Plan to match revenues accordingly •  (Basic) sources of revenue:

–  Program revenues –  For-profits: Investments –  Nonprofits: Grants and donations

•  Cash •  In-kind

•  Remember: Those giving you money want to see what you are spending it on!


Workshop: Build a Quick Budget

• In groups of three, choose one venture • Revisit the inputs listed in the workplan from your last workshop • Group similar line items (budget categories) • Discuss potential sources of revenue • If you have time, do it for another venture


Worksheet Online: Budget Template


Remember: It Takes Time

• No one expects you to launch everything at once • Developing a roll-out plan and a budget are critical to gaining credibility • Always start with low resource needs, and build requirements as you go • Revisit your workplan and budget monthly!


A Look at the Venture Milestone • Please provide a detailed workplan for at least three phases over the course of the first year and a supplementary budget expressing the financial implications of taking those steps.

• If you’d like, you can use the Work Breakdown Structure (WBS), expressing all tasks SMARTly: Specific, Measurable, Attainable, Relevant and Timebound.

• You can use the Simple Budget Template that’s online, or another template for your budget.


Every Gold Loop Counts • While everything is a work in progress, the Workplan should try to anticipate your venture needs • Be conservative in planning: things always take longer and cost more • The more you think through the details, the less you’ll worry about them later.

Ventures are a collection of details – and out of the details beauty emerges.

Economy & Finance

5 introduction to Operations and Finances