Business planmooc ef-spdf

BUSINESS PLAN –EFS (EMPOWERMENT FOR SUSTAINABILITY)

Course: social entrepreneur -

1) Does the business plan document a clear social problem that needs to be addressed ("The Problem" on

Babele)? Are the beneficiaries of the startup clearly defined ("Customers and Beneficiaries" on Babele)?

Social problem:

Overview: Microenterprises in Peru with low profitability and not able to grow because of lack of access to

market, internal knowhow, financial resources and a growth plan to achieve long term success, which leads

to small scale production and management that can damage the community and the environment. This

leads to low profitability and very often to bankruptcy.

Description: Majority of Microenterprises in Peru have a low profitability, are not able to grow and have a

high probability of failure (= bankruptcy). Most of them are just surviving. There are various reasons:

1. Lack of business management

2. Lack of knowledge about the market

3. Lack of sources of financing

4. Lack of quality of their products

5. Very high costs

The lack of success of small businesses leads directly and indirectly to various social problems in the affected

local communities:

1. Lack of local consumption

2. Lack of investment in education and health of their families

3. Lack of paid and used taxes

4. Unsustainable use of resources damages the environment

5. Increase informal employment

2) Does the business plan clearly spell out the SOLUTION to the problem ("Our Solution" on Babele)? Is it

clear what the start-up will do ("Activities & Operations" on Babele)? Does the plan explain how these

activities will address the problem? (0-3 points)

Solution:

Overview: Empower our beneficiaries to grow their business making a more sustainable, profitable and

scalable business, by identifying and putting in practice opportunities for improvement when it comes to

finances, management and commercial perspectives with quality standards.

Description: We empower Microenterprises in Peru in the export sector to be more successful by social

responsible and sustainable management consulting services based on ISO 26000:

1. Management Consulting (strategic and operative management)

2. Mentoring, Coaching and Training (best management practices)

3. Joining and creating business networks and opportunities

4. Fundraising

Our consulting services involve this steps:

We will offer free of charge for microenterprises the steps one and two. That´s why we need companies

interested in investing in micro enterprises social responsible and guided by best practices to afford the cost

of improving the management provided by us (affordable cost) and the certifications involved.

Once they have achieved that goal, they can access to step 3 by a free.

Additional to the entrance fee of 50 USD we take a provision of 1% of the revenue the small businesses

generate with business with partners of our network.

So, only sustainable enterprises can be part of the network.

In order to stay in step 3, we will be monitoring and evaluating them constantly.

All our worked will be managed by a software in order to have the access of the information easily and

online.

Activities & Operations: Results Framework for Scaling-Up Sustainable Growth to Microenterprises in Perú

Beneficiaries for the first

year

Direct: Microenterprises in Peru (100)

Microenterprises in Peru is made up for no more of 10

employees.

Indirect: Families of microenterprises

Program Impact Impact-level Indicators (in a year) Data Sources

Contribute to the Livelihood

Development of the

families of Microenterprises

in Peru

G1. 90% of basic needs satisfied

G2: 80% of their children enrolled in

schools

G3: 80% with financial protection for

health care

G4. 100%. collaboration of our

G1: Visit

G2: Register in schools or

institutes/universities

(depend on the age)

G3: EsSalud - SIS

beneficiaries with several social

problems in Peru through NGO’s.

G.4 Contract or

commitment signed

previous our services.

Program Development

Objective

Outcome Indicators (in a year) Data Sources

Sustainable growth of

microenterprises in Peru

PDO 1: Increase their clients (30% a

year)

PDO 2: 100% Labor Rights

PDO 3: Reduce 30% of environmental

impact

PDO 1: Countable records

and local inspectors

(Sunat)

PDO 2: Countable records

and local inspectors

(Sunat). And reported in

“Annual Sustainability

Report”.

PDO 3: Recycled materials

used. Reported in “Annual

Sustainability Report”.

Intermediate Results Outputs Indicators for each

Component (in a year)

Data Sources

Component One:

Sustainable focus

IRC1.1: 50% with long-term vision

IRC1.2: Consider the impact in the

community and the environment in

IRC1.1: Visit

IRC1.2: Monitoring &

Evaluation

their process

Component Two:

Capacity building

IRC2.1: Reduce logistics costs by 40%

IRC2.2: Planned purchases. Not to

buy of individual form (for

emergency) any more than 10 % of

the planned thing.

IRC2.3: To reduce 90% of tributary

infractions

IRC2.4: Key standardized processes

IRC3.4: To reduce 50% the level of

products returns

IRC2.1: The Profit and Loss

Statement

IRC2.2: Logistic software

IRC2.3: Local inspectors

(Sunat)

IRC2.4: Organizational and

Operational Manual

IRC3.4: Compare between

two years the financial

Statement Analysis

Component Three:

Profitable

IRC3.1: Increases 15% half-yearly the

sales with the same resources

IRC3.1: Countable records

Component Four:

Scalable

IRC4.1: 20% of our beneficiaries

export their products

IRC4.1: Countable records

Component Five:

Certified and Sustainability

reports based on the GRI

Reporting

IRC5.1: 60% of our beneficiaries

certified

IRC5.1: Certification, GRI

Activities

Component One: Sustainable focus

Defining Action Plan based on long term conditions.

Evaluate their actions and theirs consequences (economic, social and environmental) to improve

the initial action plan.

Identifying their stakeholders (community, employees, NGO’s, other local companies, etc) in

order to obtain information about needs or problems of their stakeholders.

Monitoring & Evaluation to measure the impact.

Component Two: Capacity building

Formally organized enterprises, which include:

Analyzing the situation of the micro-enterprise.

Establishing values, vision and mission.

Defining the chain of process and their interrelation.

Process and policies of the company.

Analyzing critic points.

Teach them best practices in management, quality control, human resources, improving

information flows and procedures; applying sustainability (manage the impacts referred to as

profits, people

and planet).

Monitoring & Evaluation we will measure the Integrated System of Management

Component Three: Profitable

Access to big and Fair Trade Market

Network which let them to access to the market.

Through how-know (process) to reduce costs (chain of value or production).

Business relationship with big companies, who aspire to have good reputation through business

relationship with sustainable companies.

Management guided by Policies and procedures documented to assure the constant quality of

their products and services.

Component Four: Scalable

Network in which these companies share knowledge and/or products.

Business relationship with big companies.

Partnership between microenterprises.

Component Five: Certified and Sustainability reports based on the GRI Reporting

Analizing and identify the need to implement a quality system.

Identifying the critic points.

Action plan to implement the quality system.

Training employees involved in the project to apply the system.

Create the Quality Management System in the processes to be certified.

Internal Audit. Previously to prove the quality system in order to identify failures and to amend

it.

Certification Audit.

Keeping the quality system. Certification Audit firm do a annual audit after to get the

certification. EFS will keep a system of control periodically.

Management guided by responsible politics and procedures focus on environmental, human

resources, social responsibility (ISO 26000).

3) Does the business plan contain a convincing earned income strategy ("Revenue Model" on Babele)?

Does the plan identify who will generate the income? Is it likely that the startup can succeed to actually

generate the planned income? (0-3 points)

The income strategy is based first on the turnover which will be generated by our consulting services and

trainings. After we trained and consulted our customer for free we will invoice from each of them 50 USD as

entrance fee to be a member in our business network. Important is to acquire big companies as sponsors

which will pay per average 125 USD per consulting/training day and can use it for their CSR strategy. All

member of our business network have to pay a provision of 1% of the revenue of generated business with

companies inside our business network. This will be a sustainable finance mechanism.

The other important income strategy is the use of different external funding mechanisms, especially in the

first 3 years. The first 2 years the FSE members have to calculate with out of pocket payments. The general

focus will be on charity donations from big foundations, Peruvian government programs and international

Economic Development Funds like European Development Fund. We won’t collaborate with Investors to

decrease the structural dependence and to be invested time.

4) Are you convinced that the startup has a reasonable chance to create a market space for itself ("Market

Segment" on Babele)? Does the plan contain a full analysis of the competitors and how the startup will

compete with these ("Competitors" and "Entry Barriers" on Babele)?

Market Segment

According to the official statistical office of Peru 96.2 % of companies are micro enterprises

3.2 % are small businesses, are Medium Business 0.2 % and 0.4 are big business.

There is a segment of microenterprises that is not being treated with high quality services therefore its

aspirations to be a competitive and sustainable enterprise are frustrated. It segment is so important for the

impact social and economy of Perú. These businesses employed nearly 8 million people, nearly 47.4% of the

economically active population (EAP) in the country.

The 84.7 % of microenterprise are informal , are not legally registered which means that these enterprises

which are a dynamic part of the economy are not leveraging the potential acquire inserted in the formal

sector. they are fragile because of their low productivity.

There is a low percentage of formal microenterprise (3.6%) are able to export because the others don’t have

the necessary certifications and could not compete in a market with sustainable companies

Although these companies are fragile by low productivity have the great advantage of being resilient and

creative to work with few resources, which keep them in the market so that the Peruvian state has created

the Mype law (tax and legal benefits) and various competitions for the association . They are not being used

by microenterprises.

They need They need guidance, advice and mentoring according to the nature of their business In order to

become sustainable. We see that Microenterprise still there is no clear vision of partnership and its benefits

; Micro-enterprises should be grouped in associations to hire technical assistance services and pay for

expenses. But nowadays microenterprises don’t have that business vision .

Competitor or substitute

In Peru there are various companies and Ngo that provide services to small, medium and large companies on

sustainability issues . It not included in the microenterprise. As the following:

Peru2021 (ngo): Diagnostic RS, CSR workshops in house, Benchmarking Best Practices, Development and

evaluation of Sustainability Reports, Impact assessment on human rights , Benchmarking management and

human rights policies.

GERENS ( consultant): Formulation and implementation of strategies for corporate social responsibility CSR.

Peruvian government programs

Prompyme - Centre for promotion of small and micro enterprises

Copeme - Consortium of private organizations to promote the development of micro and small enterprises

Peru Entrepreneur Programme - Ministry of Labour and Employment Promotion - MTPE

One of the weaknesses of this type of both private and government initiatives is that they have little interest

in microenterprises according to their nature to become certified providers of other larger companies. So

they can be part of the system market Business to Business.

Statistics

As we can see there are a lot of microenterprises that constantly are creating new ones, but unfortunately

they can´t remain for long.

Besides, there is a huge business that is not formally, which later we could help them too.

Source:

Las mipymes en cifras 2013

©2014 Ministerio de la Producción

Calle Uno Oeste N° 060 - Urb. Córpac - San Isidro, Lima, Perú

www.produce.gob.pe

Esta publicación es un producto de la Dirección General de Estudios

Económicos, Evaluación y Competitividad Territorial

del Viceministerio de Mype e Industria

Entry Barriers

The main barrier is the lack of confidence of entrepreneurs to join. Build trust and stay in time is a challenge.

They prefer (microenterprises) to prefer stay small and not have access to financing for not borrow They are

afraid of borrowing .

Conclusion:

We can see that the help that microenterprises could receive are focused only in a few aspects of the

management, but it doesn´t include all the process (management, social responsibility, sustainability, access

to the fair trade market) as we offer.

5) Is the team well prepared to execute the plan ("We the people" on Babele)? Does the plan identify who

will take over which tasks once the startup has been launched? Are you convinced that the team member

are well placed for their respective tasks? Is the ownership structure and organisational form of the

startup clear? (0-3 points)

Management team

Name Where from?

My experience? My motivation? Team Role

Consulting Competencies

Thomas Gebhardt

Germany 15 years working in private and public sector as human resource manager and business management consultant

Contribute to increase the global balance between advantaged and disadvantaged people.

Team Coordinator?

Strategic Mmgt. (BSC, SWOT, OD) and Operative Mgmt. (HRM, QM, Sales, PM, BM), Fundraising

Liliana Alfaro

Perú 20-year track record managing new and existing business models, project management and daily operational quality control

Put my entrepreneurial knowledge to social mission

Team member

Strategic Management Operations Management (process, quality, risk)

Cecilia Rubio

Perú 15 years working for public and private agencies in communication for sustainable development, consulting in social projects , methodologies for entrepreneurship and social responsibility programs

Contribute to equal access to development opportunities for people

team member

Methodologies for the inclusion of complex issues Diagnosis and implementation of plans for social responsability.

Yalenny Florentini

Spain 10 years working for multinational company as human resources consultant and actually working as Corporate Social Responsability manager in a Foundation.

My belief in the improvement in the management system according to an environmental, social values, being economically sustainable.

team member

HR management, Methodologies in sustainability based on standards, Annual sustainability report.

6) Does the business plan clearly identify the startup CAPITAL NEEDS of the venture ("Financial Plan" on

Babele)? Do you feel that the capital needs are sufficient for the tasks planned? Does the plan provide a

convincing pitch to why prospective investors should invest in the startup? (0-3 points)

The 5 years financial plan is conservative and considers all relevant variable and fix cost factors like salary,

communication, facilities, etc. The first 2 years are the startup phase which will cost ca. 45,000 USD. The

establishing of the business will take 2 years and cost ca. 260,000 USD. In the fifth year we reach the break

even and will have costs of ca. 233,000 USD.

Revenue Model: Transactional Revenue Model

Risk Analysis

The replication and growth strategies

First of all, we will start a pilot in order to validate our assumptions, and assure a repeatable and scalable business model, while adapting, iterating on, and improving our business plan as we continually learn from our customers.

So, using customers’ input to revise our assumptions, we will start the cycle over again, testing redesigned offerings and making further small adjustments (iterations) or more substantive ones (pivots) to what is not working.

Finally, with our tested model, we will replicate it in a new market, following the next steps:

1. Market analysis

What is the need and what is the size of the new market? How well can our current business model /

operations address that need?

Are there any obvious paying customers? How easy will it be to build relationships with them?

Who would we be competing with?

What other barriers to entry exist in the new market?

2. Critical factors

Will these factors that enabled us to succeed with our initial pilot, will help us to reach

sustainability?

How difficult would it be to re-create it?

How much effort is required to maintain it?

How easily can be understood by the new market?

3. Replication model

We would like the Wholly-owned growth: 100% owned and controlled by us.

Of course, we do not reject i) affiliations, like franchising/licensing, joint ventures or partnership

agreements. It depends on the results in the market analysis and critical factors. May be we will

need more help and it would be better to select some kind of affiliation; ii) or dissemination, which is

characterized by our original organization sharing or exchanging our information or best practices

openly to others.