Creating a Business Plan for Your NGO

1
Creating a Business Plan for Your NGO

• 6th Annual Microenterprise Conference BYU
• Troy Holmberg
• March 14, 2003

2
Overview

• Introduction What is a business plan and why
  should I have one?
• Elements of a Business Plan for an NGO
• Description of Organizational Focus
• Target Market
• Viability
• Growth Strategy
• Management
• 10-15 minute work sessions between each section
• Your goal Create the building blocks for your
  organizations business plan

3
Part I Description of Organizational Focus

• Identify the problem or need
• Describe your proposed solution to the problem
• Mission Statement
• What you do
• How you intend to solve the problem

4
Identify the problem or need

• 49 of Filipinos live in poverty

5

• 69 of LDS Filipinos live in poverty. Over 60
  live in rural areas

6
Senator Sergio Osmena

• There is clearly a need for Filipinos to
  undergo a paradigm shift in the way they view
  their future economic well-being as individuals
  and as a nation. From the prevailing mind-set of
  depending on government or large business to
  create jobs for them, the Filipinos outlook
  should radically shift toward their giving
  importance to generating their own income and
  jobs for others through the entrepreneurial path.

7
The Problem

• 900 Filipino missionaries released each year
• Return to rural provinces
• Few jobs in the provinces
• No money for school
• Limited economic future
• Somewhat less church activity when poor
• Tend to migrate to Manila
• Emigrate to Hong Kong, U.S., Canada, and Arab
  countries

8
A Solution

• Create a non-profit academy to teach
  Micro-Entrepreneurship skills to Filipino
  Returned Missionaries

9
The Mission Statement

• A mission statement must be simple and clear
• It has focus on what your organization really
  tries to do, then do it in a way that everyone
  can recognize their contribution to the goal
• -Peter Drucker, Managing the Non-profit
  Organization

10
Critical Elements to an Effective Mission
Statement

• OPPORTUNITIES
• Where can we, with our limited human and
  financial resources, really make a difference?
• COMPETENCE
• What are we good at? What can we do better than
  everyone else?
• COMMITMENT
• What do we really believe in?
• -Peter Drucker, Managing the Non-profit
  Organization

11
Examples of Mission Statements
The academy will annually provide 125 Filipino
returned missionaries with the necessary hope,
motivation, education, and tools needed to plan,
start, and build their own province-based
businesses.
12
Yehu Bank Mission Statement

• the mission of the bank is to combat poverty by
  empowering the very poor women of rural kenya to
  help themselves by giving them access to very
  small loans and other basic financial services,
  which can be used to start or expand their small
  businesses

13
Description of Organizational Focus

• Who you are
• What you do
• How you solve the problem

14
what is the yehu bank?

• the yehu bank is a project being administered by
  choice humanitarian in the rural costal region of
  kenya
• yehu in the swahili dialect means our
• it is a bank for the poor, of the poor, offering
  savings and small loans to women for
  income-generating ventures

15
what kinds of small businesses?

• animal husbandry
• vending agricultural products
• vending handmade crafts
• kiosks vending basic necessities

16
typical bank member kiosk
17
how does it work?

• 5 women form a group and join an existing bank
  centre
• they meet weekly in their own village with a bank
  worker and each contribute a small amount of
  savings for six months
• The first small loan is made to a member of the
  group
• social collateral
• the peer group encourages solidarity among
  members who effectively co-guarantee each other's
  loans

18
woman receiving a loan at a weekly centre meeting
with bank manager
19
Part II Target Market

• Who is your customer? What is your niche?
• Who else is addressing this need or problem?
• How do you reach your customers and market your
  services?
• What is your organizations competitive
  advantage? What do you do best?

20
ACE serves Filipino Returned Missionaries

• 900 Filipino returned missionaries released each
  year
• Over 7,500 Filipino RMs
• 500,000 members of the LDS Church in the
  Philippines

21
Marketing Strategy

• Local church leaders
• LDS Employment Resource Centers
• LDS Church Education System
• LDS Church Philippines Area Presidency
• Word-of-mouth by ACE graduates

22
ACE Strengths Competitive Advantage (what can
we do better than anyone else?)

• Entrepreneurship Education
• Case-based, hands-on learning
• Relevant, practical training for job creation in
  the rural areas

23
Part III Viability

• How do we measure results? How do we know we are
  fulfilling our mission?
• Do we have a plan for sustainability?
• What does it cost to provide our services?
• What is our fund-raising strategy?

24
yehu bank key metrics

• of members 2000 members in 60 villages
• Repayment rate over 97
• of loans given 1515
• Cumulative saved by bank members 40,000
• Cumulative loaned 115,000
• of employees 14 all native Kenyans
• Retention rate of members 93
• Cost per unit loaned .59 cents
• Portfolio at Risk 3.9
• Active clients per Credit Officer 227
• Operational Self-Sufficiency 57

25
(No Transcript)
26
(No Transcript)
27
(No Transcript)
28
(No Transcript)
29
Part IV Growth

• What will we look like in 5 yrs?
• What is our strategy for growth?
• Do we desire growth?
• Do we increase number of clients served,
  introduce new services, or both?
• Do we expand geographically, or try to penetrate
  deeper into the current countries we are serving?

30
ACE Growth Strategy

• Fixed capacity for number of students attending
  ACE (125 per year)
• Growth by adding services, particularly business
  development services (BDS)
• Joint Ventures
• 10 Distance Learning Centers
• Community Payback Program
• Create opportunities for contracts with LDS Church

31
Yehu Bank Growth Strategy

• 16,000 members by end of 2005
• Operating in 530 villages
• 6 branch offices
• 70 employees of the bank
• 119 Operating self-sufficiency
• Growth funded by loans from capital markets
  rather than grants
• Become the leading microfinance organization
  serving rural Kenya

32
Part V Management

• Brief description of the people who are
  responsible for executing your organizations
  mission
• Include members of your board or advisory
  committee if they add expertise, credibility, or
  are key participants in the organization
• Your management team is critical...it is not how
  good your idea is, it is how capable your team is
  of executing that idea that matters to funders!

33
Part V Management - ACE

• Steve Gibson Co-founder of ACE
• Started nine ventures, one of which ranked as a
  top 500 fastest growing private business in US
• Entrepreneur-in-residence at BYU Entrepreneurship
  Center. Taught many entrepreneurship courses
• Weekly columnist for Deseret News,
  entrepreneurship and small business advice
• Former board member of EMI, Philippines Area and
  BYU Communications Advisory Board
• Married to Bette Gibson, 4 children

34
Management Bios

• Bette Gibson Co-founder of ACE
• 5 yrs at BYU, Early Childhood Development
• Masters from University of Colorado, Denver
• Created a project-based, participatory curriculum
  for ACE
• Tony San Gabriel Director of ACE
• Masters from Asia Institute of Management the
  premier business school in Asia
• 7 yrs with MFI, Philippines Enterprise
  Development Fund
• LDS Church Education System
• Four ACE graduates teach, coordinate outreach,
  student life and biz development services