More Debt For More Good
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Case study presented in collaboration with Alterna Saving at the 2016 Social Enterprise Toronto Conference on debt financing for social enterprises.
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More Debt For More Good
- 3. OUR SERVICES • FURNITURE REMOVAL • FURNITURE SELECTION & SHOWROOM • FURNITURE DELIVERY • EMPLOYMENT PROGRAM FOR MARGINALIZED YOUTH (LEG UP) • WORKSHOP FOR REPAIRS AND UPCYCLING FURNITURE • CHAIR AFFAIR GALA & FUNDRAISING ABOUT US
- 5. TOP PICTURE brush SOCIAL BUSINESS MODEL 2013 5244 OUR FURNITURE DONORS 5487 CLIENTS SERVED 2670 AGENCY REFERRED APPOINTMEN TS Poor Financial Health
- 6. THE 2014 CHALLENGE Provide more to the community while achieving financial sustainability as a charity • 26,000 sq foot facility to pay for • 5 trucks for deliveries and pickups • moving millions of lbs of furniture • 40+ employees • $200K / month in expenses • Limited brand and funder awareness BOTTOMLINE: REVENUE GENERATION WASN'T KEEPING UP WITH OUR COSTS LOOKING INTO THE MIRROR
- 7. THE OPPORTUNITY • Our new marketing was working! • Client demand was never higher! • We understood our business model • We had the management in place • We had the capacity in the building • We only needed more trucks! ABOUT USIF ONLY WE HAD MORE TRUCKS
- 8. VALUE OF A TRUCK… • GENERATES positive ROI • ADDS $30K / mnth in revenues • CREATES more employment for marginalized individuals • PROVIDES furniture for over 1000 more clients / year • BECOMES a much needed Asset FURNITURE BANK’S 37% ROI 20% ROI 53% ROI 65% ROI
- 9. OUR ASK $75K FOR A NEW TRUCK $25K MORE ON LINE OF CREDIT MEET
- 10. START
- 11. UNDERSTAND YOUR BUSINESS INFORM YOUR BOARD KNOW WHAT YOU CAN AFFORD! HAVE A RELATIONSHIP WITH YOUR BANK!
- 12. PITCH YOUR BUSINESS PLAN EXPLAIN HOW YOU WILL OVERCOME YOUR WEAKNESSES HIGHLIGHT THE BUSINESS VALUE OF THIS ‘INVESTMENT’ HIGHLIGHT THE SOCIAL IMPACT OF THIS ‘INVESTMENT’
- 13. HURRY UP AND WAIT… This is NOT a fast process. GET APPROVED !!! Lots of Paperwork Lots of Forms Lots of Approvals $50/ DAY We invested To allow our new business plan to happen… Ultimately for Furniture Bank…
- 14. TOP PICTURE brush SOCIAL BUSINESS MODEL 2015 6478 OUR FURNITURE DONORS 7758 CLIENTS SERVED 3254 AGENCY REFERRED APPOINTMEN TS Close to Financial Self Sufficiency 41% MORE SOCIAL IMPACT THAN 2013
Editor's Notes
- $1500/month to finance each truck Alterna loan – $50k
- Cost of running a truck each month = 10K Return – 30K 67% ROI
- Currently = 75K LOC