Social Venture Plan Development by hcj

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									Developing and Organizing a
Viable Business Model




                                                                Entrepreneurship Challenge
                                                             Workshop 2: Aaron Levitt Social
   Session 2 of the Levitt Social Entrepreneurship Program
   February 23, 2013
Flow of This Morning’s
Session
•   Introductory Dialogue and Activity
•   Business Models and Their Value
•   Stages of Social Venture Development
•   What Is Your Venture or Initiative?




                                                                   Entrepreneurship Challenge
                                                                Workshop 2: Aaron Levitt Social
•   The Two Pillars of a Viable Social Venture Business Model
    • Program Design and Logic Model
    • Core Business Model Elements:
       • Market
       • Money
       • Management
• A Quick Assessment
• Next Steps in Our Program and Process
“NO GOOD ENDING CAN BE EXPECTED
IN THE ABSENCE OF THE RIGHT
   --I Ching
BEGINNING.”




                                     Entrepreneurship Challenge
                                  Workshop 2: Aaron Levitt Social
Workshop 2: Aaron Levitt Social
   Entrepreneurship Challenge
Let’s Talk…


• What is a “Business Model?”




                                          Entrepreneurship Challenge
                                       Workshop 2: Aaron Levitt Social
• What is a “Viable Business Model?”
Stages of Development
• Opportunity Identification, Clarification, and
  Assessment
  Leads to
• Viability Assessment (or Feasibility Assessment)




                                                         Entrepreneurship Challenge
                                                      Workshop 2: Aaron Levitt Social
  Leads to
• Business Plan Development
But not in a single cycle linear process: a strong
  venture development process will involve
  multiple iterations, gaining refinement from each
  cycle.
Opportunity Identification/
Clarification and Assessment
Growing Out of Exploration of Session 1
•Asset Identification and Evaluation
•Asset Valuation
•Opportunity Identification and/or Clarification




                                                      Entrepreneurship Challenge
                                                   Workshop 2: Aaron Levitt Social
•Opportunity Evaluation
•Opportunity Valuation
•Risk Assessment

Result: Overall Assessment of Opportunity Worth
Further Exploration and Development
Some Risks to Assess
(from Dees et al 2001)
•   Management Capacity
•   Workforce Capacity
•   Organizational Culture
•   Organizational Infrastructure




                                              Entrepreneurship Challenge
                                           Workshop 2: Aaron Levitt Social
•   Enterprise Concept
•   Level of Required Capitalization
•   Prospects for Long-Term Funding
•   Prospects for Changes in Marketplace
•   Changes in Knowledge and Technology
•   Stakeholder Backlash
•   Competitor Response
A Sound
      Business Model
Integrates
 • Viable and Relevant Mission and Vision
  (the social purpose)
• Real Value Proposition




                                                   Entrepreneurship Challenge
                                                Workshop 2: Aaron Levitt Social
   • Social Value Creation Cycle (in the form
     of a logic model or theory of change)
• Resources to Finance and Fund It
• Capacity to Implement It
     Value Creation Cycle
(from The Nonprofit Strategy Revolution. David LaPiana 2008)




                                                               Daivd Renz: Midwest Center for
                                                                Nonprofit Leadership at UMKC
       Strategic Fit

 Market:
-Clients
                           Organization
- Donors
                            Capacity
  &




                                             Entrepreneurship Challenge
  Funders




                                          Workshop 2: Aaron Levitt Social
               Strategic
                  FIT




                Mission,
            Vision & Values
Viability Assessment
Three Basic Elements:
•Market Assessment
•Money Assessment




                                            Entrepreneurship Challenge
                                         Workshop 2: Aaron Levitt Social
•Management Assessment

Leads to Overall Assessment of Venture
Feasibility and Viability
    The Market
(Customer) Question


  Payor
Customers:




                              Entrepreneurship Challenge
                           Workshop 2: Aaron Levitt Social
 -Donors     Beneficiary
  &          Customers
  Funders     (Clients)
Market Viability Assessment
Builds on Assessment of Porter’s Five Forces

Focus on:




                                                  Entrepreneurship Challenge
                                               Workshop 2: Aaron Levitt Social
•Demand
•Competitive Advantage
•Differentiator(s)
•Price and Cost Structure
Competitive Advantage
(The Nonprofit Version)
This is the ability to produce social value by:
•Using a unique asset
      and/or




                                                     Daivd Renz: Midwest Center for
                                                      Nonprofit Leadership at UMKC
•Delivering outstanding execution

•We employ the perspective of Porter’s Five Forces
Model to examine and understand where and how
we fit
                                 Strategy vs. Reality




Daivd Renz: Midwest Center for
 Nonprofit Leadership at UMKC
Let’s Talk…
Share with your colleagues…

In two minutes or less (your elevator speech):




                                                          Entrepreneurship Challenge
                                                       Workshop 2: Aaron Levitt Social
•What is your venture or venture concept? What
is the social venture or program initiative that you
have determined has great potential for creating
social value? What is the “social value
proposition” and how do you expect to deliver on
it? (or your best case scenario)
     Key Components of
      A Well-Developed
       Program Design




                                    Entrepreneurship Challenge
                                 Workshop 2: Aaron Levitt Social
(The Social Value Proposition)
Mission & Vision
• Mission, Vision, Values
  • The mission:
     • Continuing philosophical perspective
     • Makes explicit reason for the agencies
       existence
  • The Vision:
     • Is what can be accomplished by providing
       mission services
     • An end state
Strategy and the 5 “Ps”
• Strategy as a Plan
• Strategy as a Ploy
• Strategy as a Pattern
• Strategy as a Position
• Strategy as a Perspective
Program Hypotheses
• A series of “if-then” statements
  • Cause and effect (factors)
  • Process
  • Output

• Means-Ends continuum
Program Hypotheses
• Development Steps
  • Identify Critical Issue and Factors
  • Cause and effect of each factor
  • Identify resources, data and assumptions
  • Brainstorm solutions
  • Prioritize solutions
• Provides framework for service
Policy and Budget
• Policy Guidance
  • Communication Systems
  • Client Interaction
• Financial Guidance
  • What will the strategy cost?
  • How will we fund the strategy?
  • Is it financially feasible?
• Finances
   • What will it cost?
      • Direct?
      • Indirect?
   • Is there revenue?
   • Who will pay for the program?
   • Do we have the capacity to financially manage?
• Implementation
   • What do we need to do to start the program?
   • Where will we provide the service?
Objectives

• Provide short-term and long-term outlook
  • Intermediate results: Immediate impact or change
  • Final results: The long-term impact or ultimate
    change
• Should be stated in measurable terms
  • Time frame
  • Target of change
  • Results
Outcome Objectives
• Service Result
• Flow from the problem analysis
• Establish criteria for numbers served
• Multiple outcomes for a strategy or
  program
Process Objectives
• Target program actions
• Establish milestones necessary to meet
  intermediate outcomes
• Focus on internal activities
Group Work
Program Design
• Inputs
   • Client
   • Staff
   • Material resources
   • Facilities
   • Equipment
Program Design
• Throughput
  • Service Definition
  • Service Task
  • Method of Intervention
• Outputs
  • Unit of service
  • Service completion
  • Quality
Outcomes
• Numeric Counts
• Standardized Measures
• Level of functioning scales
• Client satisfaction
   These Add Up to Become
       a “Logic Model”
A very useful device to plan and explain:
•Your assumptions and expectations for how you
expect to link:
•Inputs, which will support




                                                    Entrepreneurship Challenge
                                                 Workshop 2: Aaron Levitt Social
•Activities, which will lead to
•Outputs, which will add up to
•Outcomes, which will result in
•Long-term Outcomes
             and Community Impact
Take A Few Minutes…

Please take about ten minutes to sketch out
 the basic logic model that explains the
 process by which your social venture or




                                                 Entrepreneurship Challenge
                                              Workshop 2: Aaron Levitt Social
 initiative will accomplish the outcomes
 that will result in social value and
 community impact.
Return to Viability
Assessment
Three Basic Elements:
•Market Assessment
•Money Assessment




                                            Entrepreneurship Challenge
                                         Workshop 2: Aaron Levitt Social
•Management Assessment

Leads to Overall Assessment of Venture
Feasibility and Viability
Money Viability Assessment
Initial Consideration of
•Revenue Potential
•Investor Potential




                                Entrepreneurship Challenge
                             Workshop 2: Aaron Levitt Social
•Available Capital
To Integrate These: CompassPoint’s
     “Dual Bottom Line Matrix”




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                                     Workshop 2: Aaron Levitt Social
Management Viability Assessment
• Mission Compatibility
• Core Competencies
• Venture Capacity (including complexity)




                                               Entrepreneurship Challenge
                                            Workshop 2: Aaron Levitt Social
• Core Constituents or Stakeholders
Social Venture Planning
In other words, social venture planning is
  the process by which we plan and
  articulate how we will integrate




                                                Entrepreneurship Challenge
                                             Workshop 2: Aaron Levitt Social
• Money
• Market
• Management
To successfully deliver social value.
The Summary: Key Elements of
Feasibility or Viability
Assessment
  1. Explain the Venture
  2. Market research on potential customers
  3. Desire and Need for Product or Service
  4. Assets and Capacity (including management, personnel, facilities, &
  competence)
  5. General Business/Revenue Model and Pricing Strategy




                                                                                 Entrepreneurship Challenge
                                                                              Workshop 2: Aaron Levitt Social
  6. Preliminary Financial Information:
       a) Start-Up Costs and Time needed to begin to generate revenue
       b) Start-up capital needs and availability
       c) Pro Forma/ Financial Projections (including estimates of revenues
           needed to break- even and timing to break even)
  7. Discussion of feasibility:
       a. Mission relevance
       b. Risk acceptability
       c. Competitive capacity
       d. Quality & quality assurance
       e. Feasible for your organization now?
Let’s Do A Quick Assessment
• Take about ten minutes to work alone or with
  your work group, if you have one, to take a look
  at the “Quick Market Test” and then complete
  the “Quick Market Test Scorecard.”




                                                        Entrepreneurship Challenge
                                                     Workshop 2: Aaron Levitt Social
• After you have completed this, we will invite
  observations about the topics where you know
  the most and the topics where you will want to
  engage in further research and analysis.
Move to a Business Plan?
If the venture is deemed feasible…
 • Build on all of the information of the
   feasibility assessment.




                                               Entrepreneurship Challenge
                                            Workshop 2: Aaron Levitt Social
 • Add depth to each of the elements of
   the feasibility assessment to create a
   business plan.
Wrap-Up:
  For the March Workshop
• Meet and Begin to Work With Your Coach
• Develop and Clarify Your Logic Model (complete the form)
• Use the Worksheet Sets 4 and 5 (from the book, Venture
  Forth) to gather and organize your data to begin to assess the
  feasibility or viability of your venture.




                                                                      Entrepreneurship Challenge
                                                                   Workshop 2: Aaron Levitt Social
• Read the materials on financial viability assessment in
  preparation for next workshop, which will focus on “Funding
  and Financing Your Social Venture”
• Contact your Levitt Program facilitators and advisors (Laufer,
  Helm, Andersson, and Renz) as needed to help you and your
  coaches to progress in the development of your social
  venture.
                                     • Questions?

                       • Comments?

   • Clarifications?




Workshop 2: Aaron Levitt Social
   Entrepreneurship Challenge

								
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