I will attach a power point and a word doc that includes our previous work.
What is needed in the final draft?
a) You need to work on a Power Point Presentation – please use your best MS Office skills to produce an interesting and innovative presentation
b) How many slides? About 20 to 25 slides + any additional information you want to add
c) Please review the comments sent on my feedback to the teams- not following my comments in your final draft can result in penalizations for not following/complying with requests for changes
Materials to complement the social venture project:
chapter 2 of Get Backed: Get_Backed_ch2.pdf
– this is a short explanation of what I may be expecting for the First and Final Draft to Cover as the intentions for what you need to deliver is how I can be enticed to Invest in your Social Venture. The slide shows that can answer the different aspects of the social venture.
Remember that Get Backed is not just about for-profit businesses, it can also be used in non-profits. More information about this book can be obtained here: http://www.getbacked.com
Situations to consider:
a) Please feel free to combine what you have proposed at the individual level and interact with your team mates – I have placed in each team page the proposal that I thought it was the best to polish for this project
b) The final draft needs to be about 20 to 25 slides as I will ask you to expand/incorporate more information from the first draft so if a prospective donor just view the power point slides, he/she will be motivated to give you money (in other words, just placing an outline without further explanations does not help)
c) Another way that you may want to treat this Power Point Presentation: Think that this is a Brochure that you are sending to prospective donors — if you were the one receiving this presentation, will you donate money or help out?
Aspects to improve in the Business Model
1) Remember, you are proposing a social venture (not a charity) so your efforts are for
a) Be clear on the source of revenues and costs to generate a Margin Surplus as follows
Revenues – Variable Costs = Contribution Margin
b) from Contribution Margin you take out the fixed costs (rent, utilities, general & administration, marketing, etc.)
This will give you a Net Surplus
c) From the net surplus you can allocate into the following
- a X% to the potential cause that you want to fund
- a X% to reinvest in the business
d) Think about how particular products can be fitted to the new challenges of today: facemasks, protected equipment, sanitizers – remember, the world changed and social distance plus regular cleaning and caution will be on the line for the next 2 years (not only covid-19, different germs/bacterias/viruses emerge over seasons so today people are getting more aware about protecting themselves)
2) Avoid just asking donations to give to other organizations
- Individuals will donate directly to such organizations and skip you right away
- Some organizations are already established so they will use you and perhaps your good intentions will not be satisfied as they also have fixed operations expenses (salaries, rent, marketing, etc.)
- Remember, it is naive to think that for every $ you donate, they will give the 100% to the persons in need – sometimes it is not true because they will also need to have money in trust funds for their future operations (what they call: endowment)
What you can do?
a) Hire individuals in need (e.g. students, unemployed, homeless, etc.) who will be the ones receiving a wage directly and will do the labor – that is how you can help these persons in need. Especially, these are good times to employ people as most people lost jobs so social ventures will represent a new angle for employing staff.
b) Be in the middle between organizations
I gave several examples for teams.
- You make the product at $5
- You sell the product to an organization (any type) for $10
- That organization can sell the product to their customers at $20 – so they already got a $10 contribution margin
- In your situation, you are getting $5 in contribution margin: $10 – $5
3) Remember – not all your “sales = proceeds” can go directly to your particular causes
- Need to deduct any variable cost
- Need to deduct any fixed cost/expense
- Need to reinvest part of the surplus; otherwise you will go bankrupt
4) Sources of funds
The aspect for getting supporters to start the business requires a better fine tuning. Sometimes, individuals will be willing to sponsor the social venture or even become “customers” paying for the products to buy. Even the first line of money givers are the persons behind the social venture. So that is something that you need to account. For example, if the venture requires an initial investment of $25,000 – members of the team can also be initial investors — let’s say $10K
People will think that if the social entrepreneurs are also placing money, they are convinced that you really are invested in the idea
Now- what is the reality?
The $10K that the team “sponsor/donate/give” will be returned back to the team in terms of salaries as if you start a social venture, you will expect to also get a source of income (no-one will be motivated to work for free). The major difference is that social ventures will not pay higher salaries than regular for-profit businesses, but you need to consider some money that will go to your pockets for working in the venture. That is the idea (see #3) because you cannot just claim that all proceeds go to charity as the ones running charities are not working for free (they also get salaries)
5) It is not bad to think as a profit-making business
Please recall: the major difference is that instead of distributing your surplus to investors (like in for-profit companies), you are designating particular % for specific needs. Even more, the distribution will not be steady as first you need to have Cash available because you can get Paper-Accounting Surpluses but your bank account will show $0
Remember, even large for-profit organizations (Apple, Microsoft) did not pay dividends right away, they waited for several years and once they do it, it is only a small portion
Just as an illustration: Apple pays $0.77 per quarter as a dividend = $3.08 per year when the earning per share in 2018 was $11.91 – so that is the typical mistake that unfortunately other instructors do not emphasize with students (some found out about this in SBM and Strategic Mgmt)
Style and Slides recommendations:
- Try to be consistent in which bullet points you want to use for the entire presentation
- Be consistent in font type/size and be uniform throughout the entire presentation
- Avoid using Red Font = Losses in a business mindset
- Avoid 1-paragraph slides
- Bullet points: keep them short (no more than 2-3 lines)
- Avoid crowded slides — usually 1 text box + 1 picture is good; however, don’t place multiple pictures – split the info into several slides
How the final draft will be graded?
- Content: 40 points
- Viability: 30 points
- Organization/Quality: 30 points
What about team work points?
I will review the peer evaluation to assign the 25 points in terms of
- Submitting the evaluation on time: 10 points
- Quality of the answers submitted in the peer evaluation: 15 points