1. Social Impact, May 2008 Risk Analysis & Contingency Planning “Failing to plan is planning to fail” -Effie Jones

2. Social Impact May 2008 The CVE Bakery: How Can You Plan for the Impossible? What Happens When a Good Plan Goes Bad…

3. Social Impact May 2008 And Even When Things Go Right, Things Can Go Wrong… NW Works Janitorial and Business Plan Actual growth exceeded plan by 330% Board of Directors, staff and infrastructure issues Mission in question

4. Social Impact May 2008 NW Works Lessons Learned Business plans need to be flexible and dynamic. Where you start is not where you’ll finish Getting the culture ready is not something that is often addressed as a part of making a NP business successful- it needs to be Core issues need to be addressed ahead of time or as they arise, including:

5. Social Impact May 2008 Valuable Questions to Ask What if scaling has some negative impact on clients? What if the success or failure of scaling threatens to change your mission? How will your stakeholders deal with a failure? How will your stakeholders deal with a success? What is your scale?

6. Social Impact May 2008 Contingency Planning Use “what if…” scenarios Develop “Plan B” (and Z) for major decisions Analyze major risks and make plans to mitigate them Test Business Plan assumptions Conduct a sensitivity analysis

7. Social Impact, May 2008 Most Common Problems of implementing scaling plans

8. Social Impact May 2008 Mouse trap’s built and nobody comes Grand expectations Insufficient marketing Wrong product Wrong market

9. Social Impact May 2008 All things to all people No clear: Niche Target market Differentiation strategy Lack of clear competitive advantages We sell everything!!

10. Social Impact May 2008 But we still have checks… Undercapitalization Slow start up Unexpected expenses Overstocked inventory Didn’t plan for business cycles

11. Social Impact May 2008 Low capacity to deliver Inexperienced business management Untrained/wrong staff Weak systems & infrastructure Chaos

12. Social Impact, May 2008 Risk Analysis Exercise

13. Social Impact May 2008 What is a Risk? Possibility of loss or injury Someone or something that creates or suggests a hazard

14. Social Impact May 2008 Risk Analysis What can go wrong? What exactly is the risk (cause not symptom)? What are important risks? What shall we do to mitigate or reduce severity or avoid risk? (actions) Don’t confuse risk with cost If risk materialize can have costs

15. Social Impact May 2008 Remember the SWOT? weaknesses Likelihood of becoming a real risk? Budget size Probability Outcomes/impact if risk does happens? Staff Money Time Customers Etc. Threats

16. Social Impact, May 2008 Sensitivity Analysis Exercise

17. Social Impact May 2008 Risk Management Start with the most severe risks List possible actions to reduce probability and/or cost Some risks can be avoided (e.g. avoid a specific requirement) Contingency Planning - for the most severe risks that cannot be mitigated List actions to take should the risk materialize/occur

18. Social Impact May 2008 Ongoing Process What did we learn? What are the tasks of RM? What is the risk status? What has to be changed?

19. Social Impact, May 2008 Business Plan Pointers

20. Social Impact May 2008 What’s it for? Sales document for raising grants from donors and investors. Internal management guide for all business functions. Communication tool to inform key stakeholders

21. Social Impact May 2008 What’s a “Good” Business Plan? Solid business concept Viable business model Realistic and quantifiable financial projections Achievable targets Meaningful social impact Demonstrates demand A competent management team Analyzes risk and plans for it Doable!

22. Social Impact May 2008 Tips #1 Analysis to action (situation and risk) Information relevant to decision-making Data, facts, stats, numbers – back it up!! Timeframe Format Use of titles and subtitles Graphics / pictures Length annexes

23. Social Impact May 2008 Tips #2 Language Repetition Crisp and clear Compelling State assumptions Executive summary State problem, goals and needs up front Key points