Risky business - business model innovation in infrastructure
1. Business Model Innovation
- Risky Business - CVATplus
CORE - York
Naomi Sampson
Development Manager
18 September 2013
2. Presentation overview
About Tameside
and CVAT
Our history of
income generation
Key questions we
asked ourselves
Planned vs.
organic growth
Culture change
Where are we
now?
Next steps
Important
principles / lessons
learnt
3. About Tameside and CVAT
Part of greater Manchester city region
Population 220,000
• 51st
most deprived area in England
‘Established’ VCS relatively small
CVAT – new organisation (formerly Tameside
Third Sector Coalition and Volunteer Centre
Tameside)
• Income £850,000, 27 staff
• Good relationships with sector and partners
• Traditionally done some ‘low key’ income generation
4. Our Income Generation Journey
2008 (?) increasingly asked:
• “do you know a consultant who can.....”
• “could you do....”
Board aware of ‘impending financial doom’
• Lots of eggs in same basket
• Target to diversify income
Formed income generation sub group
• Board and staff involvement
5. Some key questions for us
What are we good at?
What assets have we got?
What do people want to buy?
What could we do that could be profitable?
How would it fit with our mission, aims and
values?
How much financial risk do we want?
6. Marketing: why T3SCplus?
Strong awareness of our ‘brand’ across
greater Manchester
Plus = “in addition to”
Helps demonstrate that activity is on top of
‘core’ offering
• Helps us to differentiate what is ‘free’
7. ‘CORE’
SERVICE
Generic infrastructure
services
‘Free’ to frontline
groups in Tameside
‘ADDED
VALUE’
SERVICES
DEVELOPING
ORGANISATIONS
Governance reviews
Strategic and Business planning
‘Fit for Purpose’ reviews
Performance Coaching
CIVIC
PARTICPATION
Participatory events
Improving 3rdSector ‘Voice’
GRANT SCHEME
DEVELOPMENT &
MANAGEMENT
Scheme evaluations
Participatory Budgeting
EQUALITY AND
DIVERSITY
Obligations and ‘in practice’
8. Organic or planned growth?
Planned growth
• Positive:
• Clear strategy / goal
• Easier to see what
success looks like
• Negative:
• Higher start up cost
• Higher financial risk
Organic growth
• Positive:
• Can try different ideas
out / flex
• Lower financial risk
• Negative:
• No focal point
9. Organic or planned growth?
• CVATplus grown organically
• No clear brand or strategy until this year
• Low levels of investment
• No start up cost
• No dedicated staffing
• Marketing cost = £500
10. Culture change - internally
Expectations within staff team
• “everyone can do something”
We’re charging: can we meet the quality
expectation?
We’re asked our view / expertise – it’s okay
to ask about payment!
Financial systems and processes
Growing skills
11. Culture change - externally
Honesty with frontline organisations
Ensuring we still meet our mission
One size doesn’t fit all – flexibility
Alternatives ways to ‘pay’ for services
12. Money, money money (a-ha)
Income generation target factored into
budget
• But its not real money ‘til we’ve secured it
• Risk if not achieved – deficit position / reserves
What is the real cost?
Cashflow is king
• Agree payment profiles with clients
• Invoice promptly
13. Where are we now?
• 2012/13 generated £64,227
• Variety of products delivered
• Business planning / ‘Fit for Purpose’ reviews
• ‘Building third sector engagement’ for 2 LAs
• Grant programme development / grant management
• Bespoke training delivery
• equality and diversity; sustainable funding, volunteering
• Clearer about pricing model
• Separate trading arm
• Exploring a membership ‘offer’
14. Development Service
A
‘Self Serve’ – via website (with online assessment tool which then
produces report and signposts you to relevant resources online
and e-learning courses.
Optional 1 hour mentoring session with DW (can be done
online/telephone) to help steer in right direction to relevant
resources.
Free
(except e-
learning
charge)
B
3-5 hours IAG / mentoring – likely to be used for:
• Start up support (legal form; governing doc; committee dev;
planning)
• Funding advice – development of bids / critical friend service
• Problem solving – financial management
•Volunteering support re best practice
•Accessing courses within L&S programme (online or f2f)
• Supported/underpinned by provision of toolkits / resources
Free
C
Performance Improvement Service (intensive support 5 hrs +);
may use Specialist Support Fund to cover)
• Strategic / business planning
• Bespoke training
• Quality Assurance work
• Funding strategy development work
• Marketing strategies
£
(based on
charging
model)
15. Important principles for us / lessons learnt
Fit with mission, aims and values
Core offering remains free at point of access
‘Pay what you can afford’
• CVATplus for Tameside VCS orgs
Not always about ‘money’ – other ways of
doing business e.g. sharing
16. Important principles for us / lessons learnt
Bringing people with us
• Staff and stakeholders
Happy clients best form of advertising
Work with associates you trust
Understand your costs
Be aware of your competition and your USP
Developed brand Bought in a business consultant -provided some useful help around market, skills and product analysis: cash cows, dead ducks etc Decided we should focus on things that we do, but selling to new clients and existing ones – rather than developing a whole new range of products
Important message, particularly for public sector partners, about surplus being reinvested to support voluntary and community action in Tameside (rather than private profit of a consultant)
S
S
People saying “my role is fully funded...why do I have to.....” Need to juggle growing this now, with need to deliver services we’re currently being paid to deliver Piece of work for Age Concern - team building and planning day. Outside of our core offer – they asked us can we recomend a consultant, we said yes – us or...... Team (2 people) that did it didn’t want to know what was being charged – no nerves if it was free – certainly looking at feedback, customer happy – helped boost their confidence Its not just about front facing stuff – need to ensure financial systems work, track projected income etc People are our biggest asset – that’s what we are selling. Important to take them with us. Not only needed to develop CVATplus, and help confidence of staff members, but also helps with core work. 10 people through PTTLS 5 people ILM coaching qualification awards – believe that coaching / mentoring effective infrastructure intervention. Coaching 1 person in Tameside, running a small organisation – free core offer. Also coaching someone in Derbyshire, who pays for that time.
Also need to try and build a culture, particularly locally, of charging with groups – and that is slow. Surveyed members re introducing charging policy: 57% did say they would be prepared to make a small contribution (charges will be proportionate to the size of organisation) to help cover the costs of the delivery of training. 89% said that they are happy to provide my own lunch at our training courses Was bold – but have ploughed on.....learnt from VAO already introduced it....working.....
We’ve started last couple of years with a budget that includes CVATplus target – of course, not real money until its in the bank and earned – risk for board. This is a small business – cashflow is king. The number of people that don’t think about invoicing amazes me “the money is better in our bank account than ours” Be clear about real cost – we know (to the penny) how much the hourly break even rate is for all staff – including the hourly contribution to office, overheads etc, and based on that have a clear charge out rate.
Through Beacons work – learnt it’s ok....be bolder; if people value the services we’ll over they’ll find a way to pay and they do. Selling much more now to other infrastructure organisations (and buying back in return too) – delivering to local college etc.....adapting courses.... Is a different workshop on membership offer at CORE (day before).....bronze, silver and gold (proportionate to turnover)
Leadership, drive and entrepaneurial skill key Board buy in
It takes time – don’t think sitting her on 6 months time that you’ll be earning 10% of your income in this way from 1 st April!
