Innovation & Social enterprising
HR&S offers coaching and softloans to social entrepreneurs in Sub-Saharan Africa. HR&S wants to support young or small, innovative and equal companies that, with the help of our coaching and soft loans, validate, verify and develop their business and the solution the business is based on. The goal is to create conditions for companies to develop their operations in phases where other support and financing is difficult to obtain.
As a result of our strong presence and understanding of the local context, HR&S is able to reach both the served and the under-served population and our model has proven successful. HR&S aims to maximize the social impact while finding fair ways of generating income that can cover the costs and thus make the social businesses sustainable.
Expected outcome and impact
After the project is completed, we expect the social entrepreneur to have, for example:
- Further developed their product, service or process.
- Reduced the risks in their business model.
- Attracted new customers, financiers, partners, networks, and skills.
- Strengthened the company’s position and developed new lessons and assets.
- Increased their understanding of how their company interacts with the surrounding society, mainly with regard to sustainability but also for example gender equality.
HR&S RISE Support Centres
HR&S has established HR&S Research, Innovation and Social Enterprising (RISE) Support Centres in six Sub Sahara African countries; Burkina Faso, Kenya, Liberia, Nigeria, Uganda, and Togo, and we are expanding. Four local coaches from the RISE Centres support and control each project addressing; real-time outcome evaluation planning, real-time evidence based outcome and impact assessment, branding & public relations, and accounting. Also, a local and professional auditor implements annual auditing.
Start-up funding is most often enabled through self-payment and/or bootstrapping.
- Ensuring low costs.
- Contribute with own investment.
- Start to sell something, even if it is at small scale.
- Generate a side income; offer consultancy, seek crowd-funding, seek grants.
Start- & scale up business loans
HR&S offers investment capital to facilitate social enterprising start- and scale-up.
- The loans are always combined with local coaching and annual external auditing of the programme benefitting from the loan.
- The loan is given with 10 % annual interest, and the interest is used to co-fund the programme coaching and auditing. The coaches and auditors are reimbursed a minimum annual amount of Euro 300.
- A potential loan-taker becomes eligible for a loan by attending a series of mini-courses that ends with an exam, those who pass the exam are welcome to bring their business models to a series of workshops. The trainee pays € 10 for the mini-course and for the workshop. After the workshop potential loan-takers may be invited to discuss a loan-taker and a coaching agreement.
- Each project starts small and scales firmly. The first loan is usually around € 1,000, and a second twice the amount. Usually, the total loan for each project is € 15,000.
Social good and sustainability
Sustainability and social good is about social, economic and also environmental aspects and their impact on the society and the environment. Simply described, a social and sustainable business model must ensure that the positive effects in the model exceed the possible negative effects on the society and possibly the environment.
The positive effects should be more that the negative effects
Our services and/or products will probably have both negative and positive effects on the society and the environment. Please reflect over; i) Which effects will be created through the use of our products and/or services? ii) Which stakeholders will be affected either positively and/or negatively by the effects?
An example: Suppose our company runs a process for efficient use of resources in engineering companies. In a larger perspective, we contribute to reduced deforestation due to the fact that less paper is needed and thus a smaller amount of raw material is required in production. At the same time, it may be the case that by-products arise in your process that have harmful effects on the environment. Can the positive effects created by your business outweigh the negative effects?
Does our business idea contribute to the Agenda 2030 goals?
Innovations are crucial for achieving the UN’s sustainability goals in Agenda 2030. The more innovations based on sustainable business ideas, the greater the chance that we will jointly come closer to the goals for Agenda 2030. Please reflect over; i) Which effects will our business idea will create? ii) Can the positive effects contribute to one or more of the Sustainable Development Goals (SDG), the Agenda 2030? iii) The 17 SDGs are integrated. If the business idea contributes to one of the goals, one or more other goals or sub-goals are often affected as well.
Evidence based impact assessment
As the company’s business model develops, we need to be able to follow up the effects and clearly demonstrate that our business idea produces the results we have promised.
Gender equality is a prerequisite for sustainable growth and is found in Agenda 2030, as a goal in itself but also as a perspective that must permeate the work with all goals. The business idea must therefore contribute to a gender-equal development of society linked to two main perspectives. One aspect is that both women and men take part in the business in an equal way, participate in and have an influence over the activites. Another important aspect is about analyzing and deciding whether there are gender equality aspects that are relevant within the solution’s problem area and utilization.
- Gender equality in the business management and operations team?: Is the project team or consortium equal (60/40) and do women and men have equal power and influence in the form of work effort and positions? If not, what conditions are there for you to work actively to improve gender equality within the project’s team and consortium
- Equal effects of the social business: Many problems, results and solutions can affect women and men differently. You must take this perspective into account when designing the business’s goals.
- Implementation: Have you established routines, roles or policies linked to gender equality in the implementation of your business?
How do we know how we can serv you the most?
The fact is that it does not matter who we ask, everyone will lie – at least a little and often without even knowing about it themselves. The question is therefore not who we ask, but what question we ask and how we ask the questions. When we want to know if our idea meets the customer’s needs, our idea is the last thing we should talk about to find out the answer. We should thus avoid direct and leading questions as the vast majority of people are not that strong at predicting their own future. They can e.g. hate an idea but then become the biggest user of it, or say they will definitely use a product, then maybe never care. What our potential customers, on the other hand, know is what problems, frustrations and goals they had yesterday and have today. Our customer survey is therefore structured as the below:
- Talking about our customers’ challenges (instead of our own idea).
Ambitions and Outcome Challenges.
- Base on facts.
- Asking about specific things in the past (instead of general opinions or opinions about the future).
- Talking less and listen more.
Only when we have really gotten to know our customers can we formulate an offer and start selling. So there is no point in spending much time developing our ideas and business models before we have determined that there is a real, preferably large, need for it. At the same time, the need may differ in different markets. A few hours with our prospective customers and a few questions can save us lots of both time and money in the future.
HR&S has developed templates as support, which is good as preparation, when we are going to meet your customers and learn lessons after the meeting.
Lean Start-up model
What are the problems that our product or service should solve for the customer?
What is our solution to this problem?
- The customer’s options.
How do customers solve their problem today?
- Key figures.
What measurement values do we want to use to check that we are on the right path?
- Unique value proposition.
What exactly makes our solution worth buying?
- Our competitive advantage.
Which one is it?
- Customer segment.
What does the ideal customer look like?
In what ways can we reach our ideal customer?
- “Early adopters”.
What does the ideal customer who buys first look like?
HR&S Customer survey manual
- Ideal customer hypothesis
Start with a hypothesis about who our ideal customer is, and describe the hypothesis as clearly as possible.
- Information required
Reflect over what perceptions and what facts we need to get out of the conversations with the ideal customer to learn more about how the customer views the problem / need us to solve the problem with our offer.
Before the interview, write down the questions and reflect on how to ask them. We shall not talk about our product and service in the very first conversations. In the first conversations, the questions are only about the needs. As we learn more / meet more potential customers, we can adjust the questions to deepen our knowledge and connect it more to their buying process. If there is a lot of interest and we really want to tell the potential customer about our idea, we must be sure to ask for a commitment from the customer. Without a commitment, there is a great risk that we base our development work on opinions and compliments rather than facts. Examples of commitments are time, money, contacts.
Start with a compilation about the potential customer, compiling information from their web-site and maybe elsewhere in order to show that we are as updated as possible. Then state, for example, “In order to serve you better, may I please ask:
Which are your priority ambitions and which are your main challenges rights now?”
Then ask about specific things in the past and
“Which are your lessons learned so far?”
(Maybe use other areas of the HR&S Strategy for Change.) Warning signals for that the meeting is not going so well may be that:
We talk most of the time, we only get compliments, and the answers we received do not change our idea.
- Analyse the answers and draw lessons.
We reflect over the conversations to understand if our ideal customer hypothesis holds and if our potential customers really have the problem that we want to solve. If we get similar answers from several customer surveys, it often means that we found a customer segment that is potential customers. We share also be aware of that we may very well get information that we DO NOT want actually.
- External review
To complement the image we get of our customers, we may need to talk to others, journalists, financiers, industry experts, and more. Their knowledge often complements what we find in our customer surveys.
The work is best done by a team of several people, and then it is obviously important to share knowledge with the entire team.
Our business model presents our plan for generating income to cover the costs for the programme to be implemented. It identifies the products and services that we will sell, the target market we have identified, and the expenses we anticipate. We are not just selling our products and our services, we are actually selling a combination of product, value, and brand experience. We think through a set of overarching questions, our business model, and outline them before we dive in to the details of our business plan research. Each HR&S Programme benefit from their own Business Model.
Business Model Canvas
Planning is key, also when starting and growing a business. HR&S is firm on developing a business model for each of our initiatives. We benefit from the Business Model Canvas. The Business Model Canvas is a common entrepreneurial tool that enables us to visualize, design, and reinvent our business model. It provides an overarching framework for developing a business strategy, a detailed business plan, and/or a prioritized action plan. The tools can help our startups develop a clear view of their value proposition, operations, customers, and finances. It can also help our small business owners to identify how the different business components relate to each other, which is powerful when deciding where to focus time and attention to make the business grow. The Business Model Canvas can also help entrepreneurs to address specific risks and acquire more information about, for example, competitors, and market niches.
The Business Model Canvas has nine different focus areas that make up building blocks in a visual representation of the business; Customer segments, Value propositions, Distribution channels, Customer relationships, Revenue model, Key Activities, Key Resources, Key Partnerships, and Cost Structure.
1. Customer segments
We have a value proposition for each customer segment. Customer segmentation is the practice of dividing a customer base into groups of individuals that are similar in specific ways relevant to marketing, such as age, gender, interests and spending habits. Types of Customer Segmentation: i) Demographic information, such as gender, age, familial and marital status, income, education, and occupation. ii) Geographical information, which differs depending on the scope of the company. For localized businesses, this info might pertain to specific towns or counties. For larger companies, it might mean a customer’s city, state, or even country of residence. iii) Psychographics, such as social class, lifestyle, and personality traits. iv) Behavioural data, such as spending and consumption habits, product/service usage, and desired benefits. Our customer segments are:
2. Value propositions
Our value proposition is a promise of value to be delivered, communicated, and acknowledged. It is also a belief from the customer about how value will be delivered, experienced, and acquired. Our value proposition can apply to an entire organization, or parts thereof, or customer accounts, or products or services. Our value propositions are:
3. Distribution channels
Our distribution channel represents a chain of businesses or intermediaries through which the final buyer purchases a good or service. Distribution channels include wholesalers, retailers, distributors, and the Internet. In a direct distribution channel, the manufacturer sells directly to the consumer. Our distribution channels are:
4. Customer relationships
Our customer relationships describe the type of relationship that we establish with our specific customer segments. Customer relationships are driven by customer acquisition, customer retention, and boosting sales – in other words, we need to get or acquire new customers, keep them, and grow their value to the business.
Categories of customer relationships include; i) personal assistance, ii) dedicated personal assistance; iii) self-service; iv) automated services; v) communities; vi) co-creation.
Useful questions include: i) what type of relationship does each customer segment expect us to establish in terms of atmosphere, customer service, and interactions; ii) which ones have we established and what are the preconceived notions about our industry; iii) how costly are the customer relationships; iv) how are they integrated with the rest of our business model and v) is there a way to turn our customers into “salespeople” to help us get new customers?
Our customer relationships are:
5. Revenue model
Our RISE Centre revenue model is the strategy of managing the RISE Centre revenue streams and the resources required for each revenue stream. There are numerous types of revenue models including; i) transactional revenue model is one of the most direct ways of generating revenue and entails a company providing a service or product and customers paying them for it; ii) web sales is an offshoot of the transactional revenue model, in which a customer pays directly for a product or service, except that customers must first come to your company via a web search or outbound marketing, and conduct transactions solely over the internet; iii) subscription revenue model entails offering a product or service that customers can pay for over a longer period of time; iv) two types of direct sales: inside sales, in which someone calls in to place an order or sales agents calling prospects; and outside sales, which is a face to face sales transaction; v) channel sales (or indirect sales) consists of agents or resellers selling your product for you and either you or the reseller delivering the product; vi) retail sales entails setting up a traditional store in which you offer physical goods to your customers vii) product is free, but services aren’t model is unique compared to others, the product is free and customers pay for installation, customization, training or other additional services; viii) freemium model entails that a company’s basic services are free, and users pay for additional premium features, extensions, functions, etc. (f ex LinkedIn); ix) ad-based revenue models entail creating ads for a specific product, and placing them on strategic, high-traffic channels; x) affiliate revenue model works by promoting links to relevant products and collecting commission on the sales of those products. Our revenue model is:
6. Key Activities
The Key Activities are the most important actions our RISE Centre must perform to operate successfully. They are required to create and offer a Value Proposition, reach markets, maintain Customer Relationships, and earn revenues, and they differ depending on the business model type. The core issues of key activities are; i) production – marketing, designing, producing, ii) problem-solving – training, studying metrics, improving; iii) platforms – website updating, promotion, IT; iv) networks – primarily people networks; v) financial – securing a merchant account, shop management, e-commerce. Our revenue model is:
7. Key Resources
Our Key Resources allow our RISE Centre to create and offer a Value Proposition, reach markets, maintain relationships with Customer Segments, and earn revenues. Different Key Resources are needed depending on the type of business model. Key resources can be owned or leased by the company or acquired from key partners. There are four categories of key resources; i) physical – buildings, vehicles, machines, raw goods, etc.; ii) intellectual – brand, proprietary knowledge, patents, partnerships, etc.; iii) human – creativity, experience, etc. iv) financial – cash, credit, stock, etc. Our key resources are:
8. Key Partnerships
Key partners make the business model effective. A business partnership is when two commercial entities form an alliance, which may either be a really loose relationship where both entities retain their independence and are at liberty to form more partnerships or an exclusive contract which limits the two companies to only that one relationship. The reasons for opting for a partnership varies, but healthy partnerships are instrumental in making a business success or a failure. A company can optimise its resource utilisation, create new resource streams or mitigate risks behind major business decisions by taking on a partner before starting a new course of action. It is important to note here that our organisation maybe partnering with a number of organisations for various reasons, but not all their relationships will be key to our business. Partnerships can change over the course of a business’ lifecycle. The types of partnerships that may be a necessity during year one of a start-up will differ significantly from the nature of the required partnership in year three. Please consider: i) Right Partnership Agreements: Whether our partnership is with a business or an individual, it is important for all the relevant parties to have clear partnership agreements drafted along with legal counsel. ii) Defining Expectations: An entrepreneur needs to ensure that he has shared his expectations openly with his partner and vice versa from the beginning. iii) Impact on our clients: it is important to evaluate our value proposition and our key resources and make sure our partner is filling any gaps in either. This can only be done by also evaluating how the partnership will translate to the customer. iv) Win-win situation: For a partnership to be healthy and sustainable, there need to be visible gains on both ends. v) Selecting partnerships: Some partnerships may seem lucrative in theory but fail to get off the ground practically. In addition, changes in the business context may also make some business partnerships irrelevant. In such cases, it is important to end these partnerships quickly to avoid further wastage of resources. Our Key Partners are:
9. Cost Structure
The Cost Structure describes the most important costs incurred while operating under a particular business model and can be calculated relatively easily after defining Key Resources, Key Activities, and Key Partnerships. It can be useful to distinguish between two broad classes of business model Cost Structures: cost-driven and value-driven (many business models fall in between these two extremes). Cost-driven business models focus on minimizing costs wherever possible. Value-driven focus on value creation, Premium Value Propositions and a high degree of personalized service usually characterize value-driven business models. A Cost Structures can have the following attributes; i) Economies of scale – Cost advantages that a business enjoys as its output expands; ii) Economies of scope – Cost advantages that a business enjoys due to a larger scope of operations (the same marketing activities or Distribution Channels may support multiple products); iii) Fixed cost – Costs that remain the same despite the volume of goods or services produced (salaries, rents); iv) Variable cost – vary proportionally with the volume of goods or services produced. It can be noted for example that the RISE Centre must have enough cash flow to be able to pay the assigned persons. Our Cost structure is:
HR&S uses three levels of depth of our pitch: 5 seconds, 30 seconds and 5 minutes.
– The 5-second version is a concise, single sentence explanation of our idea – the log-line.
– In the 30-second version, we explain how we plan to achieve our idea by providing just enough interesting detail to help the audience get a clearer understanding of what we are proposing – the message map.
– Once we are successful in scaling our idea down to 5 and 30 seconds, we can then broaden it to 5 minutes.
A winning pitch starts with a winning logline. A log-line should be easy to say and easy to remember, around 100 character. We identify one thing we want our audience to remember. The “one thing” should cater to the needs of the audience.
The message should be twitter friendly – less than 280 characters, and if making a presentation, using only one slide page. This involves creating the log-line, followed by three key benefits to support the log-line and ending with a reinforcement of the three benefits through stories, statistics and examples.
1. Draw a circle at the top of the message and insert the log-line.
2. Specifically outline the three or, at most, four key benefits of our product. Draw arrows from the log-line circles of the benefits. This should take 15 seconds to explain.
3. Reinforce the three benefits with stories, statistics, and examples. Add bullet points to each of the three supporting messages. We do not have to write out the entire story, just a few words that will prompt us to deliver the story. Remember, the entire message map must fit on one page and not take more than 30 seconds to deliver.
Establish the need
“What problem are we trying to solve?” Convince the audience that there is a need. Give the audience a definite, concise statement of the problem, with an example or two illustrating the need. Show the audience how it affects people. Then follow up with our solution to address the need.
State our competitive advantage
What is our competitive advantage? How is what we are pitching better than what our competitors are offering—or at least, how it is different. Also show any potential entrants in that space. What is our shield against those?
Include a sound bite
A sound bite is a short, catchy phrase. Most people don’t remember data, but they will remember a sound bite. A sound bite is the Velcro that makes the message stick. We all remember Steve Jobs’ famous sound bite, “The world’s thinnest notebook” when he first introduced the MacBook Air. It pays to spend time to come up with just the right sound bite to catch your listeners’ attention.
Introduce the team
The audience needs to have the confidence in that we have a solid team to back us up. Keep the team’s accomplishments relevant and high level, and include photos.
Take “yes” for an answer
We must know when to stop selling our idea, to be able to read the signs that tell us our idea has hit home. The more we continue to talk beyond that point, the more we are likely to say something that can reverse the positive direction.
Come prepared for the next steps. What happens if we get a positive response? What do we want our audience to do?
We shall practice our follow-up steps as diligently as we practiced the pitch. Preparation will help us move forward with confidence.
Quick & succint
It’s a known fact that attention spans are getting shorter and shorter, thus give an overview of the compelling proposition quickly, and succinctly. Brevity is the key to the initial success of a pitch.
If making a power-point presentation, do not use more than ten slidees.
Start and end a presentation with the log-line.
The art of communication
The art of communication is the language of leadership. Every pitch is essentially an audition for leadership.
Do we deliver our pitch in a way that instills confidence in ourselves and in our team? Are we able to communicate our idea with clarity?
We do not beg: There’s a fine line between showing intense passion for our idea, product or service, and showing nervous fear of losing out. While a little anxiety is understandable, letting it take hold of us will work against us. It can make us adopt an attitude of begging, which never serves us well. The ultimate power is the power to walk away. As we truly believe our idea has merit, we always and only go in as an equal. This is not advocating arrogance just reminding us to be aware of emotional leakage that may derail us.
One way to improve our pitching skills is to simply watching how others do it. There are plenty of opportunities to do this online.
Ensure that the entire team is on the same page, every person who speaks on behalf of our company or sells our product should deliver the same logline.
Sharing an idea
We all have to pitch in one way or another, whether pitching a change initiative to your team or a proposal to the board or seeking support from an investor. We all need to influence someone to adopt our ideas and give us the go-ahead. Pitching is the most nerve-wracking part of the idea creation process but it doesn’t need to be so difficult.
First Impression Matters – 30 seconds. Open with an introduction of yourself, your team, and your company. …The Solution – 90 seconds. This is the time for you to highlight your product’s unique selling proposition and show how you’ll rise above your competitors. …Wrap Up – 30 + 30 seconds.
Start- and scale-up loan
Evaluation planning Session
Perform the HR&S practical strategy Real-time Outcome Planning and Evaluation (ROPE) in full. Each initiative develops its own ROPE programme journal.
- A ROPE initiative starts with setting a goal and developing indicators to measure results.
- Then we develop an implementation plan, we secure finances, staff, and infrastructure, then we ensure knowledge sharing, the accounting procedures and the cross-cultural understanding.
- Thereafter we make an activity plan and assign people and institutions; who will do what, how and when.
- Now we implement, while in parallel we measure the results and analyse.
- Thereafter we revise the programme plan according to lessons learned and continue until we reach the goal we set up in the beginning.
Please find more detailed instructions on the ROPE page of this website and the full instrustions in the written guidelines.
Identify milestones for the RISE Centre activities and outputs. Our milestones are scheduling tools and define certain points in our programme schedules. These points note the start and finish of a sequence of activities, and mark the completion of a major phase of work. We use our Milestones to keep track of the flow of outputs and ensure that outputs appear in the pre-agreed order referred to in this agreements. At the same time, must we honour our Action “Resilience”, and respect each other’s unexpected challenges. Our milestones also guide the dates for financial activities; transfer of investment capital, report on bank account statement with explanation, programme revenue investment and revenue sharing. Use Gannt scheme for an overview of milestones.
Ensure cross-cultural understanding awareness-raising exercises. Benefit from the HR&D CROSS practical strategy.
Social enterprising equal partnership is defined as an equal share of input, responsibility, workload, benefits and profit. The programme shall basically generate social good and at the same time benefit from a sustainable economy through which the running cost of all activities for all partners in all countries are covered. It can be emphasised that social enterprising equal partnership is here defined as a collaboration that does not build aid as a business idea, thus the income is not generated through aid. We still offer financial supporters to contribute to the RISE invest fund and related activities, through crowd-funding sites, as we see it as an opportunity for givers to choose programmes that they may want to support directly.
Input: Which inputs do you plan to contribute with (investment capital, workhours, tools, knowledge, experience, administration, coordination, network, etc.)? Which inputs do you expect the partner to contribute with? Do the inputs provided by yourself and those expected from the partner(s) balance, do both (all) partners contribute equally much?
Responsibility: How do the partners share; programme, risk and sustainable economy management responsibility? How will equal partnership be ensured?
Benefit: Which are your expected benefits for yourself? Which are your expected benefits for the partner? Do the benefits for yourself and for partner balance; do both (all) partners benefit equally much?