10 Top Tips to improve your margins. Profit is not a dirty word!

Our new SSE Australia Chief Executive Celia Hodson shares her top tips on how to improve your venture’s margins.

 

 

When faced with the bigger issues concerned with running your social enterprise or venture, it can be easy to neglect the little things. However, a leaner, more profitable venture can result from making a few simple adjustments to even the most minor areas of your operation. So, where can you improve those all important margins that could make you sustainable?

1.  I start with the easy stuff first…..assess your monthly income and expenditure. Compare figures with previous months, as well as targets set out within your business plan. This will tell you whether margins are improving or decreasing, enabling you to set targets for the margin-boosting measures you introduce.

2. Think about Full Cost Recovery. Complete a full audit of your outgoings. Include everything from wages (including overtime) and supplier costs to utility bills, insurance payments, fuel expenditure and public transport costs, etc. It’s just the same as managing your household income really. Highlight areas where you think you can make cutbacks without these having an adverse effect on your social impact. But please be realistic – don’t expect to reduce costs across the board.

3. Next take a closer look at the amount of waste (in it’s wider sense) your enterprise generates. Many social enterprise can make considerable savings by taking simple steps to reduce waste or duplication. Encourage your team to use all of your resources as efficiently as possible. Ask them to treat these with the same diligence they would their home budgets or belongings.

4. Ever asked for Mates Rates? If you don’t ask you don’t get so try to negotiate better deals from your existing suppliers. Inertia on your part can lead to you paying over the odds just because you haven’t had the time to check. Ask whether they will grant reductions for your early payment. It is quite usual to receive an early payment discount of a couple of %.

5. Don’t rule out trying to get improved prices from new suppliers — providing you’re sure you’ll receive the same quality products or services.

6. If you have the space consider whether buying in bulk could improve margins. Agreeing long-term supply contracts or minimum annual purchase volumes in return for lower prices could be another cost-saving strategy, but you need to make sure this will not overstretch your finances or leave you holding supplies you don’t need so think carefully on this one.

7. Is it time you reconsidered your product or service range? If you don’t think you can attract more customers with your existing offer — maybe you should consider adding to your portfolio or adding value to an existing product or service.

8. Review your prices and cost of service regularly. As well as identifying increases in your costs, you need to keep up to speed with how much your competitors charge as well as how much customers are willing to pay. If you are confident it will not affect sales volume or contracts secured, you should always keep your prices as high as you can.

9. Focus your efforts on high-value opportunities and minimise the time you devote to those that offer the least or take up more time than they are worth. Consider how many hours it costs you to draft a bid for a relatively small grant and keep your eye open to excessive monitoring and evaluation requirements.

10. If you employ business development or fundraising staff, maybe it’s time to reconsider their targets. You could consider offering or improving their bonus, commission payments and other incentives, too.

The Power of the Board

Jeremy Nagel, MD of CocoRide

GUEST BLOG by SSE Fellow Jeremy Nagel.  Jeremy is the Managing Director of CoCoRide –  a ridesharing (aka carpooling) service for sporting events. 

If you are starting up a social enterprise, make sure you get cracking on setting up your board.  I had the most amazing introductory board meeting last month. Somehow this incredibly talented and experienced group of individuals came together to strategise on CoCoRide’s future. I ended up with a management consultant with 30 years experience, the former Managing Director of a multinational call centre, a transport consultant who’s Australia’s leading authority on carpooling, a hotshot IT consultant and an amazing nonprofit director who had raised $1.9 million this year. I tallied up 80 years of consulting experience between them.

The most amazing part was watching a group form before my eyes. I was worried that they’d come in and immediately realise that CoCoRide was a tiny operation not worth bothering with, but instead I heard a word that was music to my ears: ‘We’. Instead of “You should do this. You should do that”. I heard “Let’s do this! We’re going to do that!”. They took a look at my briefing document at the funding section and immediately said – “Jeremy, you’re crazy, you’re not going to get $6000 for this project…….you need $100k!”.

I feel so lucky and graced to have such an intelligent and ambitious board at the helm of CoCoRide. I’ve got the accountability and rigour I have been longing for.

Funny how good things sometimes come in pairs. During the meeting, we were brainstorming potential funding partners and we all immediately agreed on a prospect company. But how would we approach them? Someone suggested the mantra “first ask for advice, and they’ll give you money” – let’s invite them to the advisory board.

 Lo and behold the next day completely out of the blue, I get an email from a senior manager from this company ASKING ME if they can be on the advisory board. They saw my post on ProBonoAustralia.com.au (great place to get high quality volunteers!) and sent an application letter.

Something weird is going on here and I like it!

PS I wrote this post 4 weeks ago. Since then I’ve had another 3 board members join the team and a professional web developer volunteer to work 10 hours per week. ProBonoAustralia.com.au is the bomb!

SSE Australia Opens Brisbane Program: Apply Now!

 

 

School for Social Entrepreneurs Australia Opens Brisbane Program

The School for Social Entrepreneurs (SSE) Australia is calling all QLD social entrepreneurs to apply for the inaugural Brisbane Accelerator program in 2013.

The Accelerator Program is an exciting opportunity for up to 14 entrepreneurial individuals to work collaboratively with a talented team of facilitators, business experts and seasoned entrepreneurs to either launch or grow an innovative social enterprise.

Unlike traditional educational and training programs, the intensive 4-month Accelerator program is based on the highly successful “learning by doing” approach at SSE.  Students gain both practical business and personal skills that can be applied directly to their social or environmental enterprise.

SSE Australia currently runs programs from Sydney and Melbourne and boasts a Fellowship of close to 200 social entrepreneurs since launching in early 2009. Students’ and fellows’ ventures range from pop-up restaurants which provide hospitality training for marginalised youth to Indigenous arts enterprises and fair trade food and textile businesses.

“We are aware of the vibrant and growing social enterprise sector in Brisbane and are really looking forward to working with some of the passionate upcoming social entrepreneurs to give them the skills, confidence and networks to bring their enterprises to life,” said Celia Hodson, Chief Executive of SSE Australia.

The Accelerator Program aims to attract social entrepreneurs like Jamie Green who has travelled from his base in Brisbane to take part in the current National SSE Program run from Melbourne.  Jamie runs a social enterprise bedding company called One Night Stand which helps fund initiatives to tackle homelessness.

“At SSE, my overall business knowledge has rapidly increased, my personal network has tripled and One Night Stand has gone from a small one product business to a successful multi product company,” said Jamie Green.

SSE Australia runs practical learning programs for entrepreneurial individuals who have an idea or start–up venture with a social or environmental benefit.  The Australian SSE is part of a global network of Schools including eight across the UK and one in Toronto, Canada.

The Brisbane Accelerator Program is proudly supported by the English Family Foundation.

For more information on the Accelerator Program and to download the program brochure click here. Expressions of Interest close October 31.

Pitching Fever

GUEST BLOG by SSE Fellow Libby Ellis.  Libby is participating in the competitive Kick Starter program that was established by SSE and the Macquarie Group Foundation to provide seed funding for social enterprise start ups.  Libby runs InCharge which invests in the dreams and potential of people with disabilities. 

Libby Ellis is presented with the Action Learning Award at her SSE Graduation by SSE Fellow Shanil Samarakoon.

On waking the day after THE PITCH I immediately contacted a financial planner I met a couple of months ago and told him I was ready to pitch to any of his clients willing to listen!

As we talked back then, it turned out he had a young son with Down Syndrome. He asked me about InCharge and where I was up to. After quickly sketching out a product planning model, he mentioned he may have clients who would be interested in supporting the business.

Whether it’s a real offer or not, I don’t care because I think I officially have pitching fever.

Strangely exhausted at the end of Thursday for what ended up being only a 10 minute gig, now I feel pumped whatever the outcome! Just point me in the right direction and I’m ready to open my mouth. But this time in a compelling and passionate way!

SSE have been so fundamental in helping shape the flow and the words used in this 5 minutes. The first attempt was on the 3^rd day of the course . I stood in front of a camera with only about 30 minutes prep. Reflecting back on that video, I could only watch about 30 seconds of it. I could see the problem immediately. Rubbing my nose, ‘um-ing’, taking people down a path of pain without giving something that helped them see how they could be part of a solution. This was the very helpful feedback I received.

I came into SSE after 3 years working in my own business. I could see the opportunities to reach more people and develop a larger platform. I wanted a clearer focus for what is actually a big vision.  I pitched for a pilot that would be an opportunity for taking what I do to a collective of people and so building InCharge.

I was cool as a cucumber on Wednesday. When I practiced to my husband, not a shaky hand or quiver in the voice. On Thursday a different story. I had gone through 2 pairs of stockings already by the time I left Wynyard station. So I did what any sensible girl does when in a fluster – I went and got my hair done. I look like Justin Bieber now, but on Thursday I looked awesome! And I got a great head massage. By the time I got infront of the panel though, my hands and knees were shaking, my face was red hot.  It didn’t help that the first thing I saw was a big ‘X marks the spot’ when I walked into the room. I just had to trust in my hair.

But this opportunity has, of course, been really fantastic.

One of the most important things it has helped me to do is to clarify how I could use this (or any) grant to further the enterprise aims of InCharge.

The other has been finding the balance between drawing an audience in with a personal story and overwhelming people. How can a private moment be shared so it captures the heart of something, but also remain private?

Lastly how to use simple language and not weasel or jargon words.

InCharge invests in the dreams and potential of people with disabilities. Our vision is a society where everyone’s potential is realised and where we thrive amongst people who love and care about us.  Our role is to work with people to stand firmly in the centre of their life and take charge of their supports and services. Opportunities like those presented by the National Disability Insurance Scheme are there to be grasped. What is possible is only limited by our imaginations. We are all about working with people to unleash possibility and potential.

www.incharge.net.au

Post-script

Ha ha. How funny to have written this before being told I was shortlisted!

I feel even more privileged now to have had this opportunity. I am so looking forward to developing my business through mentoring by the Macquarie Group Foundation mentors and I look forward to seeing what happens at the other end.

The hair did indeed rock!

At InCharge we believe absolutely everyone have capacities to contribute. Micro-enterprise is a fabulous way for people typically defined as unemployable to work.

Popcorn-style reflection of the SSE National Study Block

SSE National Study Block, Melbourne August 2012

GUEST BLOG by SSE Student Paul Metcalfe on the recent 3-day National Study Block in Melbourne. Paul is currently leading a project called Rethinkers.com.au which will showcase video interviews with Thought Leaders about sustainability.

SSE interaction is all about ‘popping when you’re hot’ so with that in mind here’s my Popcorn-style reflection of the SSE National study block.

A Action learning – what’s the one thing I can do right now, to keep my project moving forward?

B Breathe. Do it consciously and feel what happens.

C Ceres and CEO’s both gave us so much and asked so little.

D Daylight, never enough of it to do all that needs to be done. And that’s ok.

E Energy. Look after your own. Remember this is a marathon not a sprint.

F Facilitators, Amy & Sofiah brought their all to every minute of every day & Food – can’t live without it, get to know where it came from.

G Gratitude, for who we are, for what we have, for each other, for this moment in time.

H Heart, make it central to everything you do.

I Impact. Integrity. Ingenuity. Igloos.

J Jan Owen. CEO of FYA. Set the bar that we can aim to achieve.

K Kinfolk Cafe, 673 Bourke St Melb. Great coffee & gives its profits to 4 social enterprises.

L lightness and Love, use them often, take them wherever you go & give them freely.

M Meredith Turnbull. Get to know her. Your life will change positively because of that experience.

N Never ever give up. Never ever. Never.

O Opportunities. We’re surrounded by them. Grab hold of one today.

P People. It’s why we do what we do.

Q Quiet – get more of it. Quit – don’t think about it. Quack – like a duck, if you’re a duck.

R rethinkers.com.au  Maura Luxoford, Tania DiMattina, Alison Rowe, Tanya Sernia, Larissa Brown, Matthew Wright, Peter Huff. Rethinkers making the world sustainable.

S StrEAT and SCARF tackling homelessness and unemployment for young people. Check them out streat.com.au and scarfcommunity.org 

T Thanks. Offer it everyday. Receive it with Gratitude (see G)

U Why U? Why not U?

V Values.  Know your own and build your business based on them.

W White House – home of Small Giants proving doing good is good for business.

X X-factor that something special within social entrepreneurs that makes them do what they do.

Y You. The world needs you more than ever.

Z Zen. Find it in Matthew Johnston’s “A-Zen the alphabet of the human heart”.
You can get in touch with Paul via Linked http://au.linkedin.com/in/paulmetcalfe1