Transcript HUD Social Enterprise Pilot

WORTH Business Model
WORTH
September 2008
Business Model Building Blocks
Product
Value Proposition
What value do the products create for the customer/client?
Client
Customer
Interface
Target Market
Distribution
Channels
Relationship
Dynamics
Who is customer / client? How can they be divided?
How can is value delivered at an appropriate cost? What is
the structure of the supply chain? Where are bottlenecks?
Special needs or considerations or requirements to
develop relationships with your client/customer?
Infrastructure
Management
Value Configuration How is value delivered? What is the structure of the value
chain?
Capacity
What are the organization strongest capabilities and
strategic assets? How will these be fully utilized?
Partnerships
Who are the partners/alliances? How are these
relationships structured?
Financial and
Impact
Aspects
Cost structure
How much will it cost? How will costs be broken down?
Returns
Benefits/returns to stakeholders? How quantified?
How do we cover our costs/meet financial objectives to do
this business?
Revenue Model
WORTH
September 2008
Current WORTH Model
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Products
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Savings products, credit, literacy
Current/past strategy:
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Fee-for-service
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Implementation through INGO partners (TSA & PCI)
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Grant Funded
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Direct implementation of WORTH program
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Partners receive TOT, materials, and TA
 Two year engagement
 Consulting fees (recovers costs)
WORTH country office (Kenya & formerly Nepal)
Technical support, outreach, training and materials provided by WORTH Kenya
Self-perpetuating/no funding
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Organic continuation of WORTH program (Nepal)
No external support
WORTH
September 2008
WORTH’s Business
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WORTH is in the business of: “Women’s
Empowerment”
Ethos:
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Provides tools for women to harness their own capacity
to become vibrant leaders, generate wealth and teach
others.
Strategies:
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Literacy
Business
Banking
WORTH
September 2008
WORTH’s Unique Attributes
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Self-help literacy
Women are business owners
Women are bankers
Self-help by helping/teaching others
Appreciative inquiry
Holistic approach that includes family and community
Market-driven business education approach
Sustainable groups/Village banks
Organic replication
Low cost
Scaleable
Village bank health check
– performance/monitoring
WORTH
September 2008
WORTH Premises
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Confidence in the capacity of women to change
their own lives
Women can do anything they want, just lack tools
Self-help focus
If women value it they will do it
Helping others increase pride
Women are owners
Group membership empowers
WORTH
September 2008
Social Franchise SWOT
for WORTH
WORTH
September 2008
Strengths and Weaknesses
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Strengths
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Proven model – replicable/scaleable, organic growth, self-funding and
self-perpetuating
Methodology and materials “in a box.”
Awards and recognition
Passion of founder/marketability of “social entrepreneur”
Support/brand/affiliation with Pact Inc. & Institute
Weakness
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Loose control (where they replicate, who they reach, approach,
materials and training)
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Risk quality/no quality control
No guarantee of growth
Program of Pact rather than social enterprise
Untested fee-for-service/franchise model
WORTH
September 2008
Opportunities & Threats
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Opportunities
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Disseminate WORTH through partner organizations (social franchises)
to increase outreach and avoid incurring overhead/infrastructure costs
Leverage WORTH track record
Social enterprise position opens new funding markets and networks
Marcia perfect profile of social entrepreneur/evangelist (funding op)
Value-added complementary program (niches)
Corporate and philanthropic funders in DRC for pilot
Reposition WORTH as social enterprise
Capture and incorporate positive innovation as it occurs in franchises
Threats
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No/low demand
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Women cannot or are unable to pay for WORTH
Franchisees cannibalize WORTH
Franchisees dilute brand
No/low demand for repeat patronage
WORTH
September 2008
Business Model Part 1
Product
WORTH
September 2008
WORTH Franchise “Product”
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WORTH Core Methodology
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WORTH Materials
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Incorporation of new innovations
Upgraded versions
New modules
Technical Support
Training
Monitoring
Certification
Peer Network
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Access network resources—i.e. funding
WORTH
September 2008
WORTH’s Product Lifecycle
R&D
Introduction
Growth
Traditional
WORTH
(Centrally funded
Direct implementation)
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WORTH
Franchise &
Micro-franchise
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Partner Model
(CPI & TSA)
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TIME
WORTH
September 2008
Maturity
Decline
Market Research questions based on
product lifecycle
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What are the market opportunities for social franchising?
How to get customers to “try new product”?
Partnership opportunities?
Attractiveness to funders?
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Does demand exist
What are the marketing needs/requirements?
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Funding opportunities?
To intermediaries
To microentrepreneurs (micro-franchisees)
Will product enhancements
Is franchise service offering different to different targets (INGO, NGO,
Corporates, WORTH Country programs, Pact)?
WORTH
September 2008
Analysis of Value of WORTH’s Products
Products
Credit
Savings
Literacy Training
Biz management
training
Target Customers
(end users)
Poor women
Poor women
Poor women
Poor women
Need or opportunity
Few alternative source
Expensive sources
No secure savings
Read and write
Numeracy
No alternative
No alternative
Product or service
Render
Village banks
Savings-led
On-lending
$5 cash box
Women helping women
Women helping women
Success stories
Benefits of product
service
Access to credit
Interest income—dividends
Bankers
Safe savings and flexible
Interest income-dividends
Bankers
Empowerment
Self-sufficiency
Self-esteem
Pride
Higher income
Empowerment
Self-sufficiency
Competitors
Savings-led credit
MFIs
Savings-led credit
MFIs / ROSCA
No direct competitors
Government adult literacy
NGOs
Integrated
Differentiation
Interest comes back to
women – not to
intermediary
No external funds
Bankers
Savings as loan capital
produces profit vis-à-vis
interest to owners(poor
women)
Self-help
Not building reliance on
external resources
Relevant content to what
they are doing as WORTH
Self-taught
Discussion led
Appropriate level
WORTH
September 2008
New potential products to test
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Franchise Packages
Version Upgrades
Niches
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HIV/AIDs
Community Health (demand)
Financial literacy
Rights and advocacy (Kenya)
Political leadership
Forestry and environment
WORTH
September 2008
Value of WORTH Franchise Services
Products
Micro-Franchisee
WORTH
Franchisee
INGO
Franchisee
Corporate
Franchisee
Target Customers
Women Entrepreneurs from
WORTH Program
WORTH country offices
International Organizations
Corporations
Need or opportunity
Business income
Maintain control of
product quality and use
Cost-recover/revenue
Rapid growth/scale of
proven self-sufficient
product; cheaper than
building own; marketable to
funders
CSR in countries,
communities where
corporate operates
Product or service
WORTH in a box
Training
WORTH
WORTH network
Certification
WORTH
Peer/franchise network
Certification
Member services (??)
WORTH
Peer/franchise network
Recognition
Benefits of product
service
Self-employment
opportunity
Increased income
Internal network
Communications
Capture innovation
Brand, complementary
program, attract new SE
funders, technical support,
monitoring, quality
assurance, accreditation,
networking opportunities
PR / Brand / Image
Community support and
outreach
Competitors
MFIs, ROSCAs, free
literacy programs
MFIs, ROSCAs, free
literacy programs
MFIs, integrated
microfinance, own
programs, other partners
Other CSR programs
Differentiation
Grassroots, community
based, organic, material
revolves around real social
issues
Network of franchisees
enables innovation and
change, transparency,
institutionalization and
growth WORTH
September 2008
Knowledge sharing and
exchange through network,
member services,
transparency, global brand
Community engagement
and empowerment
WORTH’s Value Propositions
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Value Proposition FOR the Customer
(emphasizes benefits for those purchasing
WORTH’s Franchisees):
 WORTH Works – a proven, off-the-shelf,
supported scalable, self-sufficient, high-impact
women’s empowerment program
Value Proposition FOR the client (emphasizes
social impact for those benefiting from WORTH’s
products):
 Self-determination, integrity, financial security,
personal power and peer support
WORTH
September 2008
Business Model Part 2
Client/Customer Interface
WORTH
September 2008
WORTH’s Target Market
Target Customers
WOMEN
Market Segments
Geography
Typography
Tribe? Religion?
Language group
Geography
Typography
Tribe? Religion?
Language group
International NGOs
National NGOs
Local NGOs
Countries &
Communities with
corporate operations
Influencer
Community leaders
Other WORTH women
Husbands and family
members
Community leaders
Other WORTH
entrepreneurs
Husbands/family
Peers
NGOs board/leadership
Funders
Client
Local communities
Local governments
Public perceptions
Foundation mandates
Purchaser
Women
Women microentrepreneurs
WORTH women
Funders
Government (?)
NGO (unrestricted)
Corporation, corporate
staff or Corporate
Foundation
Decision-maker
Women
Family members
(husband)
Women microentrepreneurs
WORTH women
Funders
NGO (unrestricted)
Corporation, corporate
staff or Corporate
Foundation
User
Women
Women
NGO staff (service
delivery)
WORTH Clients
September 2008
Community of interest
Microentrepreneurs
NGO
Franchisees
Corporations
Customer Benefits
Franchise
Product
Benefits
INGO
Franchisee
*Proven* program in a box; upgrades, training & TA, WORTH and Pact Brand,
program growth/expansion (complements core programs), value added impact,
cheaper than “implementing own program,” broaden network, access to proven
quality products, monitoring and open doors to new funding option, entry to
social enterprise/entrepreneurship
Local NGO Franchisee
*Proven* program in a box; upgrades, training & TA, WORTH Brand, program
growth/expansion (complements core programs), value added impact, cheaper
than “implementing own program,” broaden network, proven quality products,
monitoring and open doors to new funding options
WORTH – as
franchisee
Capture residual income to cover operating costs , scalable, increase impact ,
access new sources of funding, reposition WORTH as social enterprise,
continuous process of improvement/R&D from franchise network, strengthen
brand
WORTH
Entrepreneurs
Income, business owner, help other women, empower others through access to
WORTH, strengthen community
WORTH
September 2008
WORTH Client/Customer Interface
WORTH
Entrepreneurs
WORTH
Employees
WORTH
Market
Women
Franchisees
NGO
WORTH
September 2008
Legend: Customer
Relationship Dynamics (need to fill out)
What are the special needs or considerations required establish relationships with WORTH’s customers?
What motivates these customers to buy WORTH products?
Customers
Special needs or considerations
Motivates purchase
INGOs
Brand, complementary program, attract new SE funders, technical
support, monitoring, quality assurance, accreditation, networking
opportunities
Corporations
PR / Brand / Image
Community support and outreach
NGOs
Partnership, involvement
WORTH Franchises
Internal network
Communications
Capture innovation
Micro-entrepreneurs
N/A
Self-employment opportunity
Increased income
Communities
Involvement, local solution
WORTH
September 2008
WORTH Partners
Partner
Nature of
relationship
Benefit to WORTH
Benefit to Partner
Pact Inc.
Strategic partner;
Joint MOU
Investor, brand, relationships, strategic
guidance, field infrastructure and HR
Lessons
Recognized as an innovator
WORTH brand
Pact Institute
Strategic partner;
Contractual services
MOU
Investor, back office, services:
partnership development, financial
management services, fundraising,
impact measurement, knowledge
managements (intra/internet), IT and
systems support, strategic planning
Recognized supporter/enabler of
social innovation/case
Case for scaling
Case for incubator of social
enterprise
“Lab” for testing of new ideas-i.e.
social franchising & microfranchising
New sources of funding - social
investors
Pact Kenya
Fiduciary agent
Strategic partner
Infrastructure, local NGO (Kenyan),
local networks, legal aspects, logistics
Funding, associated with WORTH
Brand, potential franchisee
DRC???
WORTH
September 2008
WORTH Distribution Channels
Distribution Market WORTH
Distribution
Method
Franchisee
Sales Force
INGOS
Individuals
Microentrepreneurs
X
CBOs
WORTH
Country Office
Corporate
X
X
X
X
WORTH
September 2008
Governments
??
Business Model Part 3
Infrastructure & Management
WORTH
September 2008
Franchise Structures in Testing
WORTH
Global
Admin
Fundraising
Assumptions in
testing:
WORTH
Kenya
Technical Assistance
Training
Outreach
1. Will women
pay for WORTH (price
point)?
National NGO
Distribution
Channel
Sales &
Marketing
Micro-franchisees
XXXXXXXXXXXX
X X X Women X X X X X
XXXXXXXXXXXX
Customer
End user
WORTH
September 2008
2. Do women want to be
WORTH Entrepreneurs?
3. Will Women monitor
WORTH programs after a
sale?
4. What incentives are
required to retain
WORTH entrepreneurs?
Franchise Models to Test
A.
WORTH
Global
Franchise
WORTH
Microentrepreneur
Women
B.
Franchisor
WORTH
Country
WORTH
Country
WORTH
Global
Franchisor
$
NGO/Corp
$
$
XXXXXXXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXX
Franchise
WORTH
Microentrepreneur
$
XXXXXXXXXXXX
X X X X X X X X X X X X Women
XXXXXXXXXXXX
WORTH
September 2008
Assumptions to test in other pilots
A: WORTH Franchisee
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Value of WORTH network
Ability to scale with this model
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B: NGO/INGO intermediary
Franchisee
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Barriers & Benefits
Revenue potential to support
WORTH in country
Repeat patronage from customers
(women)
Ability to control quality, IP beyond
first 12 months
Cannibalization from microentrepreneurs/women, other
Market demand
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Willingness and ability to pay
WORTH to be franchisee
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WORTH
September 2008
At what price
Value to franchisee
Needs and wants of franchisee
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Implications on services and
business lines (i.e. is this one
business or two)
How to maintain quality assurance and
control
Repeat patronage from customers
(intermediaries)
Revenue structure
Cannibalization from intermediary
Scalability
Does intermediary need a margin
Proposed Transition Structure
Pact Inc
Board
CEO
Pact Institute
Marcia Odell
Director
WORTH Global
WORTH
Advisory Board
TBD
Vacant
Program Assistant
Interns
Vacant
Operations
Virtue Ventures
MBA Team
WORTH AFRICA
Kenya
WORTH Kenya
Jackie
Grace
Joyce
Pilot #1
In process
Pilot #2
In Process
DRC
Suzanne
Pilot #3
Pilot #4
WORTH
September 2008
Potential Future Structure
Pact Institute
WORTH
Board of Directors
President
WORTH Global
Marcia Odell
Program/fundraising
Assistant
COO
WORTH Global
Franchise Manager
Member Sevices
WORTH Kenya
WORTH DRC
Franchisees
WORTH
Entrepreneurs
WORTH
Entrepreneurs
WORTH
Entrepreneurs
WORTH
September 2008
Value Configuration
• Fundraising
• Marketing / PR
• Member service: network
communications, updated
methodologies, new
materials, new income
producing activities, etc.
• KM and communications
• R&D and new innovations
(network)
WORTH GLOBAL
• TOT
• TA
• Monitoring
• Organizing new
franchises
• Curriculum development
• R&D (operations)
• Accreditation/certification
• Training
• TA
• Monitoring
• Mobilizes
entrepreneurs
• Data collection
• Quality assurance
• Outreach
• Sales
• Program delivery
• Monitoring
WORTH
Field Offices
Franchisee
WORTH
September 2008
Microentrepreneurs
WORTH Value Chain
Future
Establish
A WORTH
Social
Franchise
WORTH
Microentrepreneurs
Local and
Regional
replication
Value Ad:
Customer value
Lower cost
Faster implementation
Quality, proven model
Salable
Peer network
Value Ad:
Customer value
+ Rapid expansion
Greater customer insights
Customer access (language,
trust, etc.)
New products
Value Ad:
Customer value
Enhanced learning network
More products
More partners
Greater coverage/scale
Stronger brand
Social value
Local ownership
Building know-how
Improved literacy
Economic security
Self-esteem
Empowerment
Social value
+ Local solution
Local employment
Rural development
Community involvement
Enhanced learning
Social value
Employment creation
Rural development
Regional/national engagement
Building know-how
Systemic change/empowerment
WORTH
September 2008
Capacity
WORTH
September 2008
Capacity Utilization (to fill out)
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What are the organization strongest capabilities and strategic assets?
How will these be fully utilized?
WORTH
September 2008
Capacity Building for SE Transition (1)
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Independent Governance Structure
 Pact and non-Pact representation (SE)
 Board must be an operational/working board to assist
growth barriers (i.e. fundraising, finance, marketing/PR)
Human resources
 Operations, franchise, business management/sale roles
 Job descriptions not current or representative of
responsibilities
Leadership
 Focus on representation, networking and fundraising
 Social entrepreneur leading WORTH
WORTH
September 2008
Capacity Building for SE Transition (2)
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Operations
 Cookie cutter operations
 Product line and planned R&D
 Franchise services
 KM systems, operating procedures and systems to ensure
efficiencies, transparency and solid communications
Culture
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Market-orientation
Adaptive and flexible model
Strategic decision making
Business resources utilization (use strategic and business plans)
WORTH
September 2008
Capacity Building for SE Transition (3)
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Financial resources
 Decrease dependency on grants
 Shift to sales model
 Social entrepreneurship fundraising
 Shift from fund accounting to financial accounting and management
Legal and Organizational Structure
 Legal structure that enables growth (taxes, earned income,
liabilities,HR implications, opportunities for funding, allows for
franchising)
 Organizational structure that enable for self-sufficiency (i.e.
consolidated overhead, opportunities for cross subsidization, asset
leveraging, HR capacity utilization, fundraising and earned income)
WORTH
September 2008
Job Descriptions
WORTH
September 2008
Marcia Odell, Managing Director
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Fundraising
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PR and Networking
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Grant writing / business plan writing
Technical inputs to proposals
International representation
Marketing & Global Brand Management
Manage grant reporting and administration
Technical supervision to new curriculum development
Strategic planning
Board / Pact Liaison
WORTH
September 2008
Franchise Manager
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Franchise network management
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KM, communications
Franchise services
Integration of new products or process innovation
Technical inputs to proposals and grant writing
Technical consulting or supervision to technical consulting
Quality control
“Productization” of WORTH materials/methodology
Branding (product/operations level)
WORTH
September 2008
Operations Manager
Qualifications
Responsibilities
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Strategic and business
planning
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“Proven track record” of:
managing a growing
company/social enterprise
leadership experience
 Africa/developing country
experience
 Entrepreneurial
 Successful fundraising/contract
negotiation
 MBA or masters’ level education
 Excellent written and oral
communications skills
 Creative problem solver
 French a plus
WORTH

Sustainability
Growth
Leadership and oversight of
senior management
Reporting to the board
Operations Management
Donor relations
Organizational accountability
Fundraising
September 2008
WORTH Advisory Board
One or more of the following:
 Jean-Louis
 John Whalen
 Nancy Murphy
 Matt Medlin
 TBD
WORTH
September 2008
SE Technical Expertise
Responsibilities
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Social Enterprise design
Market research
Business planning and strategic planning
Fundraising support
Connections/network linkages
Social Enterprise Capacity
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Knowledge transfer
Marketing support
Support operations, field testing (R&D) and implementation
WORTH
September 2008
Business Model Part 4:
Financial & Impact Aspects
WORTH
September 2008
WORTH Cost Structure
Ongoing
Subsidy
Required
WORTH Global
Cost Center
Overhead, marketing,
fundraising, communications,
franchise services,
professional fees
Partial
Cost
Recovery
Until??
Forecasts
Profit
Making
WORTH Country Offices
Overhead, operations
fundraising, sales, R&D,
Franchise services:
TA, monitoring
Training
WORTH
Franchisee
Profit center
(Will need to discuss
Cost/fee structure
Here)
Franchisee
Profit center
WORTH Franchise
Package
(Purchase
Materials &
Services)
Micro-franchisees
WORTH
September 2008
Revenue Model
Pact Institute
= internal flows
= external flows
$$
Equity Investment
WORTH
Global
$$$
Philanthropic
$$ Subgrant
Subsidy
Franchisees
$$
Fees
WORTH Country
Fees $$$
$$
Philanthropic
Legend:
WORTH Micro-Franchisees
WORTH
September 2008
Potential Funding Sources
Funders
Hybrid
Foundations:
* Program Related
Investments
Social Venture Funds:
* Social Loans
Government:
* Soft loans
Pact
Institute
Earned Income
Fee-for-service
Sales
Franchise fees
WORTH Country Offices
WORTH Franchisees
WORTH
September 2008
Philanthropic
Social Investors:
* Grants
Foundations:
* Grants
Government:
*Grants
Individuals:
*Donations
WORTH Global
Revenue Sources
Consulting:
Government Contracts
Fee-for-Service
Private contracts
Training fees
For-Profit Detection
Businesses
Franchise fees
Material fees
Sales commissions
WORTH
Field
WORTH
September 2008
Social Entrepreneurship funding
Individuals
Foundations
WORTH
Global
Returns: Social and Financial
WORTH
September 2008
Returns/metrics (to fill out)
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Impact measurements
Social Return on Investment (SROI)
Financial measurements
Business measurements

How will you measure success???
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WORTH
September 2008
Model Model Informs Business Plan
Value proposition
Product and services features/design
Target customer
Market opportunity
Distribution channel
Marketing/outreach and sales model
Customer Relationships
Brand and Reputation
Value configuration
Operating model
Core competencies and capabilities
Organizational culture & management model
Partnership
Partners and partnership model
Revenue model
Financial sources and flows
Returns
Social impact model and metrics
Cost structure
Capital requirements and uses
WORTH
September 2008