Strategy for Change
HR&S offers training, coaching, expert advice, and financial loans to social entrepreneurs in Sub-Saharan Africa. HR&S supports early-stage or small innovative social companies that are in the process of validating, verifying, and developing their business and the solution the business is based on. The goal is to create conditions for companies to develop their operations at locations where other support and financing are difficult to obtain.
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. 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. Our model has proven successful.
CSR: HR&S offers the HR&S ToolKit add value to CSR programmes.
Agreed Suppliers: HR&S offers the HR&S ToolKit add value to Agreed Suppliers that offers products to the HR&S Target partners.
The problem with the Aid industry is though that scientific research has found that the system preserves poverty. HR&S has developed the “Strategy for Change” (SfC) and is implementing this tool in every programme that we run. SfC includes, among other changes, a shift in mindset from donor-driven programmes to “equal partnership research, innovation and social enterprising for improved livelihood”. This change includes the understanding that salaries are not paid for by HR&S, training is not given for free by HR&S, programmes are not funded by HR&S. Instead the HR&S local RISE centres are social enterprises that generate the income required to do local social good, in deep, close and caring collaboration with HR&S Sweden. HR&S benefits from the Lean startup model, the Lean business model and the Agile strategy.
HR&S / Action10 has provided business loans i SSA since 2009.
Lack of pay back of loan: During the period 2009 – 2021, HR&S has failed when given loans to under-served communities in every country that we have tried; Kenya, Uganda, Togo, Liberia and Nigeria. HR&S has never been successful with this during this period. This is important knowledge for us and for the whole world. The projects have been successful from an aid point of view, the expected results have been achieved as long as payments were made, but the sustainability failed, when money was spent the project died and everything we had established died. We have not been able to attract back the loan in Kenya with Amani, or Dolas, in Uganda with BanaPads and Creative Arts, in Togo with IARAD or SEVIE, in Liberia with IDEFOCS and in Nigeria with SpellAfrica. We have been able to attract back the loan in Togo with L&D and M Yawo and in Kenya with Weema, thus we are now successful in Togo when Milohum has taken over. Millicent is successful in Kenya when reaching out to a company already well established and not in in an under-served community.
Reflection/Activity: A deal between an institution in an under-served community and HR&S Sweden will most likely not work. We need our i) local branches to stay in contact with the target partners and we need to ii) strike the deal with an agency for change, like M Yawo in Togo, if in under-served community, or an established entrepreneur with good intentions, like Weema in Nairobi, iii) we must respect ActionONE in every situation, only needs and user-driven intervention. Our local branches must have a humble approach, they are not coaches, as they do not know the realities of the target partners and this then goes against ActionONE, they are facilitators, addressing outcome challenges identified by target partners through activities in the SfC scheme.
The HR&S ambitions is to empower institutions supporting social entrepreneurs to develop strong capacity strengthening procedures and testing evidence for impact.
We also target solid transparency and accountability structures.
The HR&S ambitions is also to address the intrinsic outcome challenges presented by social entrepreneurs in SSA.
Besides institutions directly supporting social entrepreneurs, do we partner with CSR programmes and European suppliers in SSA.
1. Lack of entrepreneurial competency and lack of capital
Participate in village banking where a group of small business owners put money together which they can use to get loans and repay with interest. Works very well until someone takes out a big loan and they fail to repay leaving everyone else at a loss. Very difficult to follow up due to lack of formal agreements and difficulties with tracing the person. Most people may not know the procedure involved in getting their money back.
Is the problem lack of rule-of-law, are there actually any procedure available with getting the money back?
HR&S has lost the major amount of funds provided to social entrepreneurs during 2009 – 2020. It happens in rural and in urban settings. No matter if we have agreements signed, it seems the the loan-taker will twist the reality. Also when approaching the police with documents (once) we have found that the police is also not reliable or at least not efficient. Consulting a lawyer, the lawyer warned that the police may join forces with the loan-taker against HR&S. Maybe the problem is worse if the loan-giver is a foreigner?
2. Difficult transition to online services
Closures due to the covid-19 pandemic with only essential services running forced people to turn to online services to sale their products. Increased job opportunity for online content creators. But this resulted in people selling or using other people’s content as their own (poor understanding of IP rights). Business owners who were technologically illiterate were not able to easily transition to online services. It also introduced the added cost of internet services.
3. Transport challenges
Selling products online require the seller to deliver the goods. The buyer and sellers need to develop trust. Use the pay-on-delivery model. The expenses with delivering the goods is borne by the seller. Sometimes after paying for the delivery, the buyer may decide the goods are not what they expected. If the buyer is too far, the cost of delivery is too high (can even be about 50 % of the price of the goods). Big companies have warehouses in different locations making it easier and cheaper to distribute their goods. Not an option that is available to SMEs. There is need to rethink how we look at logistics, warehousing/transportation so that the cost of deliveries and sending back packages can be reduced. Need to think of how we can overcome the
4. Government policies
Government introduces polices which may disfavor SMEs. For example banning an online platform such as twitter will mean business owners who use twitter for their business will have to look for another platform to use, move their customers to the new platform or find new customers.
5. High interest rates
There are companies that give out loans but they have very high interest rates which make it very discouraging for small business owners.
6. Difficulties to transact across borders
Very difficult to make payments across borders due to high currency conversion rates.
Some countries may have ceilings for the credit cards so cannot make purchases beyond a particular amount.
Sometimes there is need to involve a middle man/ agent to facilitate the payment who may add extra charges and makes it more expensive to acquire the goods.
7. Aid dependence and insecurities
High poverty rates due to instability, conflicts and poor disease management. Donations have not brought development. Donors should target the local populations and not just the government. Supporting local populations can boast development.
Groups of SMEs
i) Local people with no/limited education
Examples are people in the rural areas who farm. These people may not need high income. They can pay back the loan but need coaching on management skills, entrepreneurship. Also need coaching on bank registration and other procedures.
ii) Graduates with ideas but no business experience
Need coaching on how to run a business, how to access loans that have low interest rates and can support their businesses.
Governments do have systems to support SMEs but these are not well implemented at local scale. May not provide support for start-ups.
Reflections and questions
1. Does Pay-pal work in Africa?
Pay-pal allows payment across Africa but many currencies are supported. Person-person payments have only just been introduced even in the USA.
It is difficult to come up with a global solution due to country restrictions so it is best to think of country based solutions.
2. HR&S raises money through Action10 to support the RISE centers.
Does it make sense for Action10 or HR&S Sweden to use Pay-Pal to transfer money to RISE centers in Africa?
It is possible to set up accounts for payments between HR&S Sweden and the RISE centers in Africa. It will be cheaper than using bank transfers. Payments within the country are also possible if the members/customers have Pay-pal accounts. Need to discuss further on how this can be achieved.
3. HR&S branches sell services withing the country Individuals, companies and institutions within the country send to HR&S local branches as payment for services.
4. HR&S Sweden sell services to Institutions in SSA ? Institutions in Africa sends to HR&S Sweden and payment for services.
5. Can you transfer money outside the country using virtual cards beyond the country’s restriction for debit cards?
Need further consultation on this.
Challenge ONE: She had not capital but faith. She manage to get small money to survive.Where do start-upers get capital from. Kenya government demands a collatoral/guarantee for the loan. So many who need the governmental funds do not have access.
- Challenges TWO: With time she realised she need skills and a strategy. Compared with Indian businesses family where the children learn early. It can be good to have the loan later when there is already a plan.
- Challenge THREE: The network, discuss with clients and suppliers. Important to be trustworthy and to be faithful. Marketing is a challenge, depend on marketing. Social media marketing, Facebook.
- Challenge FOUR: To reach a break-even. So that they can manage their livelihood and make the business grow. Virginia made the research. Covid-19 made it more difficult. Running on a very low budget to manage the business.
- Challenge FIVE Unequal international partnership
As a result of the Aid industry, the expectation of many local partners at the offset of a new collaboration with a foreign partner is the donor-driven structure. Local partners may expect that their salaries and other programme running costs shall be paid for by foreign donors, that foreign donors shall provide donations, administrative services, coordination, training events, equipment, consumables, service and maintenance, etc free of charge.
There is often an expectation among potential partners that a foreign partner shall come onboard and sort out their problems.
The foreign partner is expected to develop an activity plan, invite for and hold meetings, write reports, offer training, pay per diems, provide grants, give donations, reimburse stakeholders as well as procure equipment; computers, internet servers, laboratory equipment and there after repair the equipment when it breaks-down as well as provide consumables. The SSA partners in return offer to attend meetings and trainings. But in reality the the SSA partner may or may not actually attend the meetings and training events, and also often expects to be reimbursed if the do attending.
Lesson learned: The lesson learned is that potential partners do not look at the traditional aid programmes as useful in actual practice. They may benefit small, some money, some knowlege, and procured item, but the motivation join a traditional aid intervention is usually extrensic, and not intrinsic.
Informed decision:1. A new potential partnership in SSA starts with a webinar paid for by the partner. The payment, besides co-funds the actual cost of the exercise, also filters out partners with only exentric motivation. 2. HR&S never pushes to implement a programme, we make ourselves visible, share about our capacity and offer, and then wait for potential partners to propose a collaboration. 3. During the webinar the partners’s expectations on each other are clarified.
The size of a donation Testimony: “How come foreigners donate so little, do they not understand how much we need or they are just selfish.”
- Fragile accountability systems
The Aid industry has not always been able to keep accounting, auditing, transparency, and accountability at the highest level in their programmes. This has created gaps that have to be addressed and that now constitute outcome challenges for HR&S. HR&S always address accountability management in the programmes, and accountability management is a parameter in the Strategy for Change.
Lack of rule of law Corruption combined with lack of rules of law keeps Sub-Saharan Africa poor.Money is pouring into the region, many want to support and invest, but the opportunities are wasted. This is our real assignment, how to handle the situation in actual practice, at the people level.
Signed agreements It seems that one of the consequences from the absence of rule of law, is that even though we develop and sign agreements, it is like this agreements never existed.
The reflection is that if we do not have rule of law, also signed agreements are not honoured….like, there is not reason, and thus no tradition to respect signed agreements. It is not part of the social culture. If this is the case, then we have to make a plan.
Prefers no interference by HR&S after funds have been transferred. Testimony: “Initially we thought that we shared a similar mind and understanding of this community and their problems, something we thought would help us to impact it. Our plan was to skill individuals and see that they can use the knowledge to improve their livelihood, verses your plans to high-jack our project making us puppets. With this background we feel it wise to liquidate our relation with HR&S without further dishonor. We also advise that since there shall be no further unity between two entities that you may stop using our brand name.”Reflection by CEO: Maybe our partner did not appreciate the principle of paying back a loan or setting up a social enterprise to generate income. Also, the partner may not have appreciated Cecilia’s efforts to communicate, in a very straigh-forward manner, that the givers money was not invested, and the programme was not implemented, as agreed. It seems the partner would have preferred continuous donations and no further interference by HR&S.Lesson learned: i) Both the local stakeholder and HR&S have important knowledge to share and the communication method needs to be improved. ii) Do not give loans where only donations are appreciated.Informed decision: Find an improved way of communication, both in terms of cross-cultural respect and efficiency.
Corruption combined with lack of rules of law keeps Sub-Saharan Africa poor. When HR&S Action10 offers loans to poor social entrepreneurs the money may not be paid back. With no local representation and a new partnership, HR&S can expect that nothing is paid back, 0%. Even if agreements are signed, and the loan conditions are thoroughly discussed, it can still be expected that nothing will be paid back, and due to lack of rule of law, there is no authority to turn to. HR&S assumes that the reason is a combination of the Aid Industry experience combined with lack of resources, harsh living conditions with immediate needs (food, healthcare school fees), lack of business management capacity, and widespread corruption. After two-five years of collaboration, assigning local coaches and auditors, training on business management and the HR&S tools, and awareness-raising about the HR&S standards, both with programme management partners and with local coaches, the paying back can be expected to be 50-70%. If the local coaches and local auditor accept the HR&S standards, acts with internal motivation and regularly interacts directly with the programme management partners and in relation to their education and capacity; evaluation planning, accounting, branding & public relations, survey management and professional auditing, then a payback of more than 70% can be expected.
- Equal partnership / Stakeholder analysis
Reflection by CEO: Equal partnership includes that both partners are actively engaged in the success of the other partner. Thus, HR&S can develop equal partnership agreements with individuals at relevant institutions with interest, power, intrinsic motivation and agency for change.
- Lack of investment capital
For extremely poor individuals, the best approach is to begin building their financial assets and skills through savings rather than debt. In table banking, members save and borrow immediately from their savings.HR&S can increase the capital available during the start-up phase of a Table Banking programme and enable more members to borrow maybe twice or three times their savings, at the same time.An interest of 10 % reimburses the management staff of the Table Bank as well as communication equipment, internet and computer, Or the Table bank programme decides to have no interest and no costs.
Hurdle to register a company in many SSA countries.
Lack of resilience from Europe
It can be difficult for Europe, with high delivery demand, efficiency and a stable infrastructure, to find time to understand and arrange for collaboration with stakeholders in Sub-Sahara African countries who work under conditions with weak infrastructure.
On-line meetings is one such example, Europe has access to stable internet, quality computers, reliable electricity, zoom and Teams accounts, which is often not the case for the SSA partners. SSA partners may therefore not be able to attend, or their audio connections are weak during the meeting. European partners may not find the time to compensate for the limited communication opportunities.
- Lack of opportunities
Lack of management skills, lack of financing solutions, lack of information and networks, weak human capital, difficult in finding market.
ActivityONE – Business Loans
HR&S offers scale-up loans to social entrepreneurs.
- The loan is given with 10 % interest.
- The interest covers the cost for local support and auditing.
- The loans are combined with local survey management and annual external auditing.
- The active members of the local operations team are reimbursed a minimum annual amount of EUR 300.
- A potential loan-taker becomes eligible for a loan by attending an HR&S workshop on social enterprising management that ends with an exam.
ActivityTWO – 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 collaboration programme 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.
ActivityTHREE – Accountability
- Agreed on contracts are signed also by witnesses.
- Payment of the loan by week (villages) or by month.
- Owner’s investment 10, 20 or 30% of the capital.
- Webinars, seminars about the aid system and the mind changing (strategy for change).
- Workshop on business management.
- Sharing of information between all stakeholders.
- Real-time evaluation of progress.
- Strike the deal with agree on SfC, an intrisic motivation, agency for change.
- Respect ActionONE in every situation, only needs and user-driven intervention.
- The “help-me” narrative must change. Once the partners are made to understand the expectations from the beginning, we’ll achieve success. The bottom line is setting the expectations right from the beginning to avoid unrealistic expectations. We shall get the right partners that could be the Change Agents to show that looking for handouts is not sustainable, but creating value will bring the desired prosperity.
- 1. We made them realized that this money to be giving to them is a loan to be paid back.
- 2. The amount given out as loan will be deducted from the principal amount at source.
- 3. We group them according to their business and the level of funds is then meant for that category.
- 4. They were made to understand that they will cross reference each other in the group, that is to say that if any member of the group default in repayment, the entire group will be held accountable.
- 5. If they are faithful in repayment, they will be qualified for applying for a higher loan.
- 6. They repay the principal on a monthly basis, more groups were being added and their businesses can expand.
ActivityFOUR – Reach ideal customers
Lean model outreach to companies with CSR and to Agreed Suppliers.
CSR: To reach ideal customers
Agreed Suppliers: To reach ideal customers
ActivityFIVE – Training events
- Training to increase the management skills, capacity building in human capital, how to get a source of loan that can be repaid, how to get access to information on the source of grants.
- Identify the institutions in your country to be hosting and financing the training events and HR&S can provide good quality training. How do we go about this?
- Local branches registered with bank account.
- RISE Centres operations team.
- Annual auditing.
- Annual SfC training events.
- 20 parallel social enterprises
Expected outcome and impact
After the collaboration programme is completed, HR&S expects the social entrepreneur to have, for example:
- Further developed their product, service and/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.
- Appreciation Testimony Thank you for all you have already done for me. It is really worthy for us. The SfC is a magic tool.
Social good & sustainability
HR&S Sustainability and Social Good are about social and economic aspects and their impact on society.
UN Global Compact
The HR&S and HR&S supported social entrepreneurs agree with the Ten Principles of the UN Global Compact claiming that corporate sustainability starts with a company’s value system and a principles-based approach to doing business. This means operating in ways that, at a minimum, meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption. Responsible businesses enact the same values and principles wherever they have a presence, and know that good practices in one area do not offset harm in another. By incorporating the Ten Principles of the UN Global Compact into strategies, policies and procedures, and establishing a culture of integrity, companies are not only upholding their basic responsibilities to people and planet, but also setting the stage for long-term success.
Human Rights. Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses.
Labour. Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment. Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption. Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
Gender equality is by many international institutions and programme considered as a prerequisite for sustainable growth. HR&S encourages that the business idea contributes to a gender-equal development of society.
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.
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 a small scale.
- Generate a side income; offer consultancy, seek crowd-funding, seek grants.
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?
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 revenue model is the strategy of managing the 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 business 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 Key Activites are:
7. Key Resources
Our Key Resources allow our business 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. Our Cost structure is:
Reaching the target market
Building a business for a specific market requires detailed research. It is important to put time into researching the solution and developing a product or service that truly serves our target market.
- To reach a target audience, we start by determining our target customer. Go into great detail about who our ideal customer is.
- Once we find our target market and a need for that market, develop a solution that best serves our target market.
- After creating a solution, we develop a marketing strategy to build brand awareness and reach our target customer.
- Upon launching and marketing our solution, we are willing to change our offerings based on customer feedback.
It is necessary to carve a niche and build a strong company. We are strenthening our capacity to reach our target audience. We reach our target audience through a variety of methods, and they all follow a few guiding principles.
1. We find and research a need. Through detailed research, HR&S partners identifies a target demographic in need of a solution. We create buyer personas; we find an area of need and zero in on who those customers are and what do those target customers want. Once we understand a need and exactly who our customers are, we brainstorm ways to fix the need. Are there any ways to best attack the problem? What do our potential customers want?
2. Develop our solution. After finding a need within our target audience, we develop our solution. This requires an understanding of the competition, the competition’s flaws and the desires of our target audience.
- Know Where Our Audience Spends Most of Its Time. Rather than forcing our audience to come to us, we consider going to the places our audience currently spends time online. For example, we join a conversation on LinkedIn to offer key insights about our business, amplify social influence and establish our company as a thought leader.
- Create Content That Appeals to Our Audience. Segmenting our audience by role, industry, and company size will help us understand what kind of information is most useful to our customers. Different content captures the attention of different audiences. Align white papers, blog posts, client testimonials, and case studies with the right audiences to achieve desired outcomes.
- Incorporate Multimedia. Studies show that users retain information 65 percent better when text is accompanied by visual and audio content. We share impactful, high-quality information in our videos about why the information we are sharing is relevant to our audiences and how it will help them improve their businesses and development programmes. We also connect further with our target audience online by sharing videos directly in blog posts, tweets, and status updates on LinkedIn and Facebook.
- Make Content Mobile-Friendly. As we begin to incorporate different types of media into our online marketing campaign, it is important for our content to be accessible by audiences across every channel, especially mobile devices. Surveys show that almost half of all global Internet users are now using mobile devices as the primary mechanism for surfing the Web. A responsive design for our website will improve SEO, combat high bounce rates and enhance the user experience.
- Stay Consistent. All of our communications and marketing assets tell our brand’s story. We tell a consistent brand story across every channel to keep consumers conscious of our brand and message. Channel consistency helps build a brand that our leads and customers can count on and increases loyalty.
How do we know how we can serve 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, which are good as preparation when we are going to meet your customers and learn lessons after the meeting.
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.
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?
partners & Resources
Business Lab Africa (BLA)
The Business Lab Africa program (BLA) works to help African entrepreneurs succeed in business areas. The program itself is subscription-based and provides quality entrepreneurship training at inexpensive price points. This makes it easily accessible to entrepreneurs in developing countries. The program’s services can be accessed via mobile or web.
BLA “offers practical, qualitative and locally relevant” knowledge around marketing, sales, global expansion, business structure, processes and business models. Teachers in this program are distinguished business experts who teach relevant skills that entrepreneurs in developing countries can use to support themselves. Thus far, it has trained more than one million entrepreneurs both online and in person. By 2022, BLA estimates that its user base will increase to at least 100,000 people.
These programs are generally tailored to fit the needs of underprivileged individuals, offering both asset transfer and training. Additionally, they do not require repayment of initial grants, which would usually create an insurmountable barrier to student success and self-sustainability. With these programs, people living in underdeveloped countries will have the opportunity to access the educational tools needed to succeed despite staggering economic situations.
International Labour Organisation (ILO)
Start and Improve Your Business Programmehttps://www.ilo.org/empent/areas/start-and-improve-your-business/lang–en/index.htm
The International Labor Organization created Start and Improve Your Business (SIYB) in 1977. It offers vocational training that has shown concrete results. People can use the locally relevant knowledge they gain from this program to work jobs that are in-demand and make a living for themselves and their families. The program also offers business management training. It teaches skills in accounting, finance, creating and maintaining business and management practices. Thus far, this program has more than 15 million users and is still growing.
SIYB has been able to change the lives of many of its users. In 2011, the program conducted a SIYB Global Tracer Study that examined the effects of the program on users’ lives. About one-third of users who had no prior experience in business before receiving SIYB training were able to generate an average of three new jobs following its curriculum. SIYB is continuing to update its technology. In fact, a new version of its web-based monitoring platform (SIYB Gateway) is expected to launch in 2020.