Survival Tips for Social Enterprises
Hosted by John Gillespie (June 2010)
This is an interesting time for social enterprises. Many have found themselves using temporary relief tactics in an attempt to endure the economic downturn. However to survive as well as thrive in the current climate, social enterprises need to be proactive andcreative when developing sustainable revenue streams that will enable them to be less dependent on fluctuations in the economy. To put it simply, stop looking in the rear-view mirror and instead focus on the future by finding innovative ways to support your organization’s mission.
While I have worked with numerous social enterprises over the past several years, I recently surveyed colleagues and clients in the industry to gather additional insight into the issues they face on a day-to-day basis. From this data as well as my personal experience, I developed survival tips that are designed to help organizations weather the current economic storm and also prepare for the future.
The tips, in abbreviated terms, are as follows:
Step one…focus on revenue generation by creating new funding sources to replace old sources that are not expected to return in the short run. Unfortunately, the recession caused many funding sources to not only dry up but completely disappear. Organizations that focus on a combination of cost-cutting and building revenue streams are historically more successful than those that simply focus on one or the other.
Step two…think like an entrepreneur and develop a new business model that includes new programs and strategic use of acquisitions, joint ventures and partnerships as a more efficient growth tool. Well-run social enterprises diversify their revenue streams to reduce the risk of reliance on one or a few large programs, events or donors.
Step four…operate at peak efficiency by building a staff that meets your needs through outsourcing and shared services. For example, some small or growing organizations may not need full-time individuals in their accounting or CFO positions. By finding the optimal mix of skills and hours through outsourcing, organizations will reap long-term savings.
Step five…take the time to systematically measure the comprehensive impact of all of your programs. This process will enable you to examine the financial impacts and how they relate to your overall mission.
Step six…retain the talent that you have by instituting creative methods to reduce burnout and reinvigorate morale. The recent economic downturn resulted in pay cuts and staff shortages, which may have your staff looking for greener pastures. Stem the tide by rewarding top performers.
Now, I’d like your insight and participation in this discussion. Here are a few questions to get the conversation started:
– What is your biggest financial challenge for the next 12 months? How do you plan to address it?
– What is your organization doing to drive new revenue opportunities? Have you modified your business model based on the new economic climate? Have you explored joint ventures, strategic partnerships or M&A?
– What are you doing to retain and motivate current staff? What are you doing to recruit futuretalent needed to carry out your growth plans?
Join John Gillepsie, president of , in the conversation.