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 organization’s 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 togenerating 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 organization’s competitive advantage? What do you do best?

20. ACE serves Filipino Returned Missionaries • 900 Filipino returned missionaries released each year • Over 7,500 Filipino RM’s • 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%

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 organization’s 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