ACCESSING FINANCIAL RESORCES

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ACCESSING FINANCIAL RESORCES

  1. 1. DRS 255 DISABILITY AND LIVELIHOOD TOPIC THREE ACCESSING FINANCIAL RESOURCES, DEVELOPING SIMPLE BUSINESS PLANS, MICRO CREDIT AND FUNDING AGENCIES AND GOVERNMENT SUBSIDIESENTREPRENEURSHIPA Brief History of the Term EntrepreneurThe word entrepreneur derives from French, literally meaning someone who takes betweenorgoes between. The earliest use of the term reflected this sense of the middleman whodirectedresources provided by others. In the Middle Ages, an entrepreneur was someone whomanagedlarge projects on behalf of a landowner or the church, such as the building of acastle or acathedral. In the 17th century, the concept was extended to include some elementof risk andprofit. Entrepreneurs were those who contracted with the state to perform certainduties, such asthe collection of revenues or the operation of banking and trading services. Asthe price wasfixed, the entrepreneur could profit - or lose - from their performance of thecontract.Richard Cantillon introduced the word into economic literature in 1734 when hedescribed threetypes of agents in the economy: the landowner who as the proprietor of landprovided theprimary resource, entrepreneurs, including farmers and merchants, whoorganized resources andaccepted risk by buying at a certain price and selling at an uncertainprice, and hirelings whorented their services.J. B. Say, a French economist writing in theearly 1800s, distinguished between the profits ofthose who provided capital and the profitsof entrepreneurs who used it. He defined anentrepreneur as someone who consciouslymoves economic resources from an area of lower andinto an area of higher productivity andgreater yield. In other words, the entrepreneur takesexisting resources, such as people,materials, buildings, and money, and redeploys them in such away as to make them moreproductive and give them greater value. This definition implieschanging what already exists;it sees the entrepreneur as an instrument of change, someone whodoes not seek to perfect oroptimize existing ways of doing things, but searches instead for newmethods, and newmarkets - different ways of doing things.In the mid-twentieth century, Joseph Schumpetertook up this theme of the entrepreneur as anecessary destabilizing force. According toSchumpeter, economic equilibrium, which optimizeswhat already exists, does not createhealthy economies. A dynamic economy takes as its norm thedisequilibria brought about bythe constant change of innovation and entrepreneurship.In the 1980s, Peter Drucker developed these earlier ideas, seeing the emergence ofanentrepreneurial economy in the USA as a most significant and hopeful event. He definedanentrepreneur as someone who always searches for change, responds to it, and exploits it as 1
  2. 2. anopportunity. He thus made innovation a necessary part of entrepreneurship. In doing so,hefocused on the management processes involved in what an entrepreneur does.David McClelland also said Entrepreneurs are persons who have a high need for achievement.McClelland’s basicpremise is that individuals with a high need to achieve willexhibitentrepreneurial behaviour.The following are some of the motivating factors of entrepreneurs.a) Displacement leading to a need to surviveb) An innate or acquired need to achieve goals of a monetary, social or political naturec) Curiosity and a need to exercise an innovative mindd) The possession of the relevant entrepreneurial traits and technical and managementskillse) Need for higher returns on time and money investedf) Restlessness due to frustration of one kind or anotherg) Need for independence and self-determinationh) Need for financial, social or political securityFurthermore, Entrepreneurs create products, services and jobs. They expand economies,improve peoples lives, provide employment (high and rising wages) and bring aboutcompetition. A competitive environment, in turn, gives rise to efficiency, meritocracy andfurther innovations and entrepreneurial drive.The potent combination of entrepreneurship andtechnological innovation can forge an environment that is conducive to further enterprise,involving even government policy in supporting entrepreneurship and innovation.ENTREPRENEURSHIP COMPETENCIESManagement CompetencyManagement competencies relate to managing key functions of the enterprise. Researchindicatesthat problems in young firms are most likely to arise in the areas of marketing,finance and themanagement of people. The competency to deal with these areas dependsparticularly on theentrepreneur in the early years of their venture when they are less likely toemploy specialists.The model entrepreneur has all-round competency in these keymanagement functions.LeadershipA leader is one who influences and inspires others to attain goals. Outstanding leaders haveavision. A vision is a mental image of a possible and desirable future state of the enterprise.Itisan ideal future that goes beyond the ordinary and perhaps what other thought possible. Thevisionprovides a direction in which the leader wants the enterprise to move.Arthur Jagoprovides the following definition: Leadership is both a process and a property.Theprocess of leadership is the use of non-coercive influence to direct and coordinate theactivities ofthe members of an organized group toward the accomplishment of groupobjectives. As aproperty, leadership is the set of qualities or characteristics attributed to thosewho are perceivedto successfully employ such influence.Outstanding leaders have a vision. A vision is a mental 2
  3. 3. image of a possible and desirablefuture state of the organization. It is an ideal future that goesbeyond the ordinary and perhapsbeyond what others thought possible. The vision provides thedirections in which the leaderwants the organization to move.Managers at all levels can formulate visions for their organizations or units. Their visionsshouldbe ethical and based on a realistic assessment of resources and stakeholders needs. Inadditions,leaders need to study abreast of environmental changes. Although effective leaderspreserve inthe face of obstacles, they need to recognize when new circumstances dictate theneed for a newvision.Marketing CompetencyMarketing can be defined as a small business function and a set of processes forcreating,communicating and delivering value to customers and for managing customerrelationships inways that benefit the small business owner. It can also be defined as a way ofchoosing targetmarkets and getting, keeping and growing customers through creating, deliveringandcommunicating superior customer value than competitors. The essence of anymarketingeffort is satisfying customers better than competitors.From the above definitions, the following are the key points; 1) Marketing is A business functionThis suggests that marketing is a deliberate activity within an enterprise. Enterprises areexpectedto carry out marketing campaigns in order to be able to get customers. They cannotassumecustomers will automatically know what they are offering and will buy without anypersuasion.Marketing is not a single activity but a process. It is the process for creating, communicatinganddelivering customer value. The small business owner creates a product or service,ensures thatconsumers are aware of it mainly through promotion activities and takes theproduct or servicewhere the customers are. It is also a process of managing customerrelationships. This isconcerned with ensuring that customers are happy about your productsor services because youprovide superior value than your competitors. The customer gives outhis/her money forsomething that is of value to him/her. 2) Marketing is concerned with getting, keeping, and growing customersMarketing involves attracting, retaining and increasing customers. Without attracting,retainingand cross selling the enterprise success is doubtful. A small business owner shoulddevise waysof attracting, retaining and increasing their customers. To attract and retain thecustomers anenterprise can use a host of strategies like offering discounts, providing superiorproducts andgood customer care. 3) Marketing involves identifying, anticipating and satisfying customers’ needsAn enterprises’ major role is to identify customer needs and satisfy them more thancompetitors.Therefore marketingresearch is at the heart of any marketing activity. 3
  4. 4. Enterprises should also anticipate customer needs and satisfy them. They should not onlysatisfycustomers current needs but should be innovative by developing offers that will makecustomerslife more enriching. According to Prof Stephen Brown of Ulster University if anenterprise paystoo much attention to what customers say are their needs and wants, anenterprise will simplymake products similar to those that already exist. Consumers start fromwhat they know, not fromwhat might be possible. It is the entrepreneurs’ job to go beyondwhat customers say they want.This calls for innovation. 4) Marketing involves choosing customersMarketing is concerned with choosing the consumers to serve. In most cases an enterprisecannotbe able to serve all the consumers. It must choose those that can be served effectivelyandefficiently. The choice of customer is at the heart of marketing. It determines all theothermarketing decisions like what to produce, the price to charge, how to promote anddistributeand a host of similar decisions. 5) Marketing involves satisfying customers at a profitMarketing activities are geared toward maximizing profits. The role of a small businessowner isto satisfy customer’s needs and at the same time make profits. The role is not just tomake thecustomers life pleasurable but also to make money for the enterprise.What is marketed?According to Kotler and Keller (2006) marketers are involved in marketing 10 types ofentities:goods, services, experiences, events, persons, places, properties, organizations,information andideas.(i) GoodsThese are physical commodities that may be produced and marketed by an enterprise.Theyconstitute the bulk of most countries production and marketing effort.(ii) ServicesThey are intangible, inseparable and perishable. They cannot be seen or heardbeforeconsumption. They cannot be separated from the supplier and also if the consumer isnotavailable at the point of delivery that would represent lost earnings. Examples ofservicesinclude the clinics, hotels and restaurants, hair salons, barber shops, schools, banks,lawfirms, car rentals, cleaning services and many others.(iii) EventsMarketers also promote time based events such trade fairs, artistic performancesandanniversaries. Global sporting events such as world cup, Olympics and commonwealthgamesare promoted aggressively to companies and fans. These events have led to emergence 4
  5. 5. ofevent management professional that work out details of an event and ensure that it isdoneeffectively and efficiently.(iv) ExperiencesBy arranging several services and goods, a firm can create stage and market experiences.Forexample a hotel can provide live music band concerts as customers enjoy their meals.Somecompanies also market experiences such as climbing Mount Afadjato or visiting KakumNational Park.(iv) PersonsMarketing of persons has become a major business. Major film stars, athletes, soccer stars,artists,musicians and others have agents and managers who market them to organizations.They are usedin endorsing products and services. Others market themselves directly such asthe politicians.(v) PlacesCountries, regions and cities compete actively to attract tourists, investors, companyheadquartersand new residents. Some places are known for certain things or events. Forexample, the Vaticanis a spiritual city; Mombasa is associated with leisure, while WaltDisneyland is associated withcartoon.(vi) PropertiesThey are intangible rights of ownership of either real property (such as land or building)orfinancial property (stocks and bonds). Properties are bought and sold and thisrequiresmarketing. Real estate agents market houses on behalf of their owners. Commercialbanksand investment companies sell financial securities to organizations and individuals.(vii) OrganizationsOrganizations actively work to build a strong, favorable and unique image in the minds oftheirpublics. They spend money on corporate identity advertisements. Universities,museums,performing arts organizations, churches and non-profits organizations all usemarketing to boosttheir public images and to compete for audiences and funds.(viii) InformationInformation can be produced and marketed as a product. This is what universities andschoolsproduce and distribute at a price to parents and students. Non-fiction booksmarketinformation. 5
  6. 6. (ix) IdeasEvery market offering includes a basic idea. Products and services are platform fordeliveringsome idea or benefit. Social marketers are promoting such ideas as ―friends don’t letfriendsdrive drunk‖ and ―A mind is terrible thing to waste‖.Finance Management CompetencyFinancing is responsible for obtaining and using funds in a way that will maximize the valueofthe enterprise. Proper financing will enable any firm to provide better products/services toitscustomer at lower prices, pay higher wages and salaries to its workers and also providegreaterreturns to the investors. Sound financing contributes both to individuals of any giveneconomy asa whole. Financing includes the following duties:a) Budgetingb) Raising funds in the capital marketc) Evaluating investment projectsd) Planning the firm’s marketing strategies HOW TO WRITE A BUSINESS PLANINTRODUCTIONAre you thinking about starting a business? Have you got a Plan? That’s Plan with capital ―P‖for Business Plan. If you haven’t written your plan yet, your business is still in the fantasy stages.A company’s business plan is what lenders such as banks and other sources of funding use indeciding to lend you money. It’s the main company document that your employees -- and you --use to gauge your company’s success and to make decisions about what you should do first,second, or not at all.If you are starting a home-based business on a shoestring, some of these suggestions probablymay not be necessary, but you still should create a plan that outlines your goals, expected costs,marketing plan and exit strategy. A business plan is your road map for how you expect tosucceed and how you will measure your success.WHAT IS A BUSINESS PLAN?A Business Plan can be defined as a document that provides a synthetic (Unreal, Artificial,Mock) view of the contents and characteristics of a new entrepreneurial project, or theperspectives to develop an existing one. It is an expression of why your Business is going to bea success. 6
  7. 7. Fundamental or Key Success Factors of a Business 1. It must have a clear business concept 2. Appropriate strategy 3. Workable document as a guide 4. Thorough market research 5. Availability of Raw materials 6. Conducive business Environment 7. Competent Human Resources 8. Good leadership 9. Financial Sustainability 10. Clear Vision 11. Understanding the culture of your market place 12. NetworkingEnvironmental Scan (PEST Analysis) a) Political – Backing from Government or its institutions b) Economic – Funding sources, is the Env’t difficult to trade in? etc c) Social – Multi cultural, d) Technological – What technology or innovation are you introducing?Here is a quick nine-step guide to what you will need in your company’s business plan: 1. An executive summary outlining goals and objectives. The executive summary introduces your business strategy and probably is the most important section for lending institutions. If you can’t persuade a loan officer in the first two or three pages that you’ve got a viable business proposal, you’re going to leave empty handed. This summary is also important as a communication tool for employees and potential customers who need to understand -- and get behind -- your ideas. 2. A brief account of how the company began. Clearly explain the origins behind the company’s creation and how you or your business associate came up with the idea to start your business. 3. Your company’s goals. Explain in a few paragraphs your short and your long term-goals for your company. How fast do you think it will grow? Who will be your primary customers? 4. Biographies of management team. The management section should include the names and backgrounds of lead members of the management team and their respective responsibilities. 5. The service or product you plan to offer. A key aspect of this section will be a discussion of how your product or service differs from everything else on the market. 7
  8. 8. 6. The market potential for your service or product. Remember that you’ve got to convince lenders, employees and others that the market you’re after is relatively large and growing. You’ll need to do some research for this section. If it’s a locally based business, you need to assess the demand for your offering within xx-mile radius, based on what you determine is a reasonable distance from your business. If it’s a Web-based business or a business that relies on both the Internet and local traffic for revenues, you’ll need to evaluate demand on a local and/or a national basis. A research report from sites such as Forrester Research can cost hundreds to thousands of dollars. But you may be able to get some basic information simply by using the Web and its many engines and directories. 7. A marketing strategy. How do you plan to tell the world you’re open for business? Will you rely exclusively on word of mouth (not a good plan unless you’ve already got a reputation)? Will you advertise in print, television or on the Web (or on all three)? Will you use online marketing tools to get your company listed on search engines and advertised on other web sites? You’ll also need to include how you plan to spend on marketing. 8. A three- to five-year financial projection. This section should include a summary of your financial forecasts, with spreadsheets showing the formula you used to reach your projections. You’ll need balance sheets, income statements and cash flow projections for the entire forecast period. The summary in this section is also where you would tell prospective lenders how much money you’d like to borrow to cover your startup costs. The assumption that you make in this section will make or break your company’s success. If you’re unsure about using this kind of financial modeling, find a professional. It’s worth the money. 9. An exit strategy. All good business plans include a section that lays out the benchmarks you’ll use in deciding to call it quits. The strategy could be based on a dollar figure, revenue growth, the market’s reception to your idea, or a consensus among top officers.IDENTIFYING BUSINESS OPPORTUNITIESI will like to use the example given by a renowned scholar, C.K. Prahalad, a Harvey C. FruehaufProfessor ofCorporate Strategy and International Business,The University of Michigan BusinessSchool, who wrote a book titled ―The Fortune at the Bottom of the Pyramid‖.  His perspective was that if we stop thinking of the pooras victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.  Four billion poor can be the engine of the next round of global trade and prosperity. It can be a source of innovations. 8
  9. 9. THE MARKET AT THE BOTTOM OF TE PYRAMIDAccording to Prahalad, the distribution of wealth and the capacity to generate incomes in theworld can be captured in the form of an economic pyramid.At the top of the pyramid are the wealthy, with numerous opportunities for generating high levelsof income. More than 4 billion people live at the BOP on less than $2 per day.This is where the market is. To enter into such a market therefore one will need innovation andtechnology.THE MARKET AT THE BOPThere is significant untapped opportunity for value creation (for BOP consumers, shareholders,and employees) that is latent in the BOP market. These markets have remained ―invisible‖ fortoo long.That is why we as young Entrepreneurs must take advantage of this market down there andcreate opportunities for ourselves. We must understand what the poor need and create value forthem by so doing we will be on the path of creating profitable ventures. 9
  10. 10. ACCESSING FINANCIAL RESOURCESFinance is the money available at the right price,at the right time, obtained at the lowest costtospend on business needs. Right from the moment someone thinks of a business idea, there needsto be cash. As the business grows, there are inevitably greater calls for more money to financeexpansion and also take care of the day to day running of the business.The main reasons a business needs finance are to:1. Start a business2. Finance expansions to production capacity3. Develop and market new products4. Enter new markets5. Take-over or acquisition6. Moving to new premises7. Pay for the day to day running of businessA business needs to assess the different types offinance based on the following criteria:1. Amount of money required2. How quickly the money is needed3. The cheapest option available4. The amount of risk involved in the reason for the cash5. The length of time of the requirement for the financeShort Term and Long Term FinanceShort term finance is needed to cover the day to day running ofthe business. It will be paid backin a short period of time, soless risky for lenders.Long-term finance tends to be spent on large projects that willpay back over a longer period oftime. More risky so lenderstend to ask for some form of insurance or security if thecompany isunable to repay the loan. A mortgage is anexample of secured long-term finance.The main types of short-term finance are: Overdraft Suppliers credit Working capitalThe main types of long-term finance that is available to a business are: Mortgages Bank loans Share issue Debentures Retained profits Hire purchase 10
  11. 11. Equity FinanceEquity finance is the money provided by the owners of the business.Sole traders and Partnerships: A sole trader will provide money from his or her own savings.A sole trader may find it difficult to raise much money from this sourceand, therefore, may takeon a partner who brings money into thebusiness.FUNDING AGENCIES IN GHANAThese are made up of the following:BANKS: Examples are: ADB, GCB, NIB ete.FINANCIAL SERVICES COMPANIES: Examples are: Bayport Financial Services, NDKFinancial Services, Bond Financial Services, etc.SAVINGS & LOANS COMPANIES: Examples are: Procredit, Unicredit, Express, First Allied,First Capital Plus, etcMICRO FINANCE INSTITUTIONS: Examples are: Excess Development Ltd, Blue Financial,etc.EQUITY & VENTURE CAPITAL COMPANIES: Examples are: Data Bank Group, HFC Bank,Ghana Venture Capital Trust Fund, Bedrock, Venture Capital Finance Company, Oasis CapitalAGENCIES THAT ASSIST ENTREPRENEURSThe African Network Of Entrepreneurs (TANOE)This is a limited by guarantee organization that seeks among other things to assist Africanentrepreneurs to build sustainable businesses. TANOE serves as a hub of hope for entrepreneurswho desire to live their dreams and are passionate about gaining the requisite knowledge tobetter position them to move ahead of their competitors and fulfill their ambition of building asustainable business.We are dedicated to helping entrepreneurs succeed. Our initiatives and programs are focused onbuilding a strong entrepreneurial environment enabling entrepreneurs to access needed resourcesand relevant information to polish their ideas, build their businesses and accelerate their businessgrowth.SevenFund.comSEVEN (Social Equity Venture Fund) is a virtual non-profit entity run by entrepreneurs whosestrategy is to markedly increase the rate of innovation and diffusion of enterprise-based solutions 11
  12. 12. to poverty. It does this by targeted investment that fosters thought leadership through books,films and websites; supporting role models - whether they are entrepreneurs or innovative firms -in developing nations; and shaping a new discourse in government, the press and the academyaround private sector innovation, prosperity and progressive human values.SEVEN is a leader in the field of Enterprise Solutions to Poverty. We ask the question, ―How dowe support those who are self-determined, action-oriented, and effective?‖ We find and invest inthe innovations of pioneering thought leaders and entrepreneurs inside the world’s poorestnations; we support contrarian research, films, books and competitions that spotlight new rolemodels and diffuse their best ideas.Ghana Start Up Capital FundGSC Fund Brief: The Ghana Start-Up capital fund is a private sector (non-profit) and a self-help initiative set-up in 2011 to massively promote entrepreneurship, provide needed support andresources to entrepreneurs, create jobs and reduce unemployment, provide skills developmentand knowledge transfer.Vision of Fund: To raise, in a decade, GH¢10,000,000 (Ten Million Ghana Cedis) throughdonations and contributions by entrepreneurs, individuals, organizations, local and internationaldonors, investments and fund-raising activities to support the development of entrepreneurshipand to invest in innovative and economically viable ideas and start-up businesses.Objectives of the Fund:The GSC Fund seeks to meet the following objectives: I. To create an enabling environment for the massive growth of entrepreneurs and the actualization of innovative ideas and sustainability of start-up businesses through the provision of needed resources and support. II. To build the skills and capacity of the youth in GhanaIII. To contribute to Nation Building and Economic DevelopmentIV. To help eradicate extreme poverty and hunger by reducing unemployment especially among the youth in Ghana (MDG 1) V. Support and empower women to build global entrepreneurial businesses thereby promoting gender equality (MDG 3) 12
  13. 13. VI. To develop global partnerships to ensure the sustainably of the Fund and the continuous fulfillment of the fund’s vision, objectives and functions (MDG 5)VII. In influence, challenge and advocate for favorable policies to ensure the sustainability and global competitiveness of Ghanaian entrepreneurs.STARTING AN NGO IN GHANAThis covers five main steps essential to setting up an NGO in Ghana. The first two are genericsteps foranywhere in the world. The final three steps are for Ghana, specifically. Feel free toshare this document with anyonewho may be starting their own NGO anywhere.1. Develop Your Vision and Mission2. Develop Goals and Objectives3. Set up a Board of Directors4. Draft a Constitution5. Register the Organization in Ghana 1. Develop Your Vision and MissionYou need a compelling vision and genuine commitment to that vision for the long-term. If youdo things right you will goMaD (making a difference) in a way that fully benefits your targetcommunities.Vision and Mission will explain your organization’s existence and focus itsactivities. And, this will ―sell‖ your NGO to theworld.Writing a vision and mission is likecrafting an elevator pitch: make it short, clear and a little intriguing.The difference between a Vision and a MissionVisionYour NGO’s vision is what the community would be if the problem is solved. A vision is the"ideal situation" that you hopeto achieve.At the most basic level, your vision could be ―WorldPeace‖.Your mission would be to ―eradicate conflict by…‖ and listing ways to do this. An eg ofa vision is ―Economic independence and environmental regeneration for impoverishedcommunities in Ghana.‖Establishing a meaningful vision requires consultation and time. Youmust identify a problem that requires a solution.Sometimes this is very complex and technicaland sometimes it is simple.The best way to determine the vision, and thus problem to be solved,is to spend time with your target group/s to learntheir needs, aspirations and future goals. Theability to be flexible and to listen is important. It’s important to get it rightnow, before you startdown the wrong path.You might want to bring technology to help a community travel faster between two villages, butthe community mightreally want and need a health clinic. Just because you have something tooffer, does not mean that it is helpful to thecommunity. You must learn to adapt your offer to theneeds.You should research organizations similar to the one you are starting to ensure you are notbe duplicating the work ofother groups. It is more beneficial to address a neglected need, than a 13
  14. 14. need that is already catered for, unless the othergroups are not doing a good job. In that case, youcan attempt to do better.Your ideal community after the problem is solved is, therefore, the basisof your NGO’s vision.Why don’t you try thinking about the problem in the community that youcould solve and how it would look when it’s solved? Then try writing that vision in less than 30words.MissionIf your vision is ―to help impoverished communities in Ghana become economically independentand environmentallysustainable,‖ then addressing this vision becomes the mission of your NGO.In other words, the mission is the ―how‖ of your NGO. How you will get it done—in a few shortsentences.The mission consists of specific goals.For example, a Foundation’s mission statement is:―To help impoverished communities developsustainable sources of income and establish practices that will regenerate thelocal environmentfor current and future generations‖.We also express this in a ―tag line‖: Income generation, re-generation, and next generation.Income generation refers to the projects we are developing tocreate sources of income, re-generation refers to theenvironmental work we are doing to ―re-generate‖ the environment in the communities where we are working on incomegeneration, andnext generation refers to the future and the legacy we aim to leave.Your NGO’s missionstatement will serve as a guide for the direction of your organization. It will also clearly explainyourfocus to donors and the general community. Basically, it’s the steering wheel of yourorganization. You wouldn’t drive aCar without a steering wheel certainly and you will probablynot drive an NGO without a vision and mission.The statement should be concise and incorporatethe core values and philosophy of your NGO.What is your NGO’s vision and mission? Can youexpress them in less than 30 seconds and less than 30 words? If not, tryrethinking and re-craftingthem on paper. 2. Establish Goals and ObjectivesEstablishing the goals and objectives of the non-profit or NGO is the next thing to do afterdetermining the vision andmission. This is the same for any organization, small or large, and isfundamental to organizational development.Let’s talk about the difference between goals andobjectives. Goals are the big hitting changes you aim to make happen.Your goals might be statedin your vision statement.You know: World peace, eradicating extreme poverty, providing acommunity drop-in house, establishing a fair trade shop,or setting up a soup kitchen.Objectives are actions that lead you towards achieving your goals, one by one.Projectsmart.co.uksays this: ―Poorly defined goals and objectives, or goals without objectives, pushes a projectintooverruns, territory battles, personality clashes, missed milestones, and unhappy clients. Goalsand objectives must beclear statements of purpose that drives the end result of the project.‖Whatthis says is that things will get messy without goals and objectives. So, let’s get to it.Goals arethe ―What‖: What you’re aiming for.If playing football it would be: ―Score 3 goals.‖Objectivesare the ―How‖ you’ll get there: ―Kick the ball between the goal posts.‖There’s no point 14
  15. 15. attempting to reach your goal if you don’t actually do anything to get there. If you don’t kick thatballyou are not going to score one goal.It’s smart to start your objectives with action verbs. Theyare ―actions‖ after all.Instead of: ―the ball kicked between the posts‖ Write: ―kick the ball between the posts.‖ Thesecond sentence is stronger.Instead of: ―The delivery of 20 mosquito nets to Mampong‖ write―deliver 20 mosquito nets to Mampong.‖This is really a language issue and the aim is to keep itsimple and strong. Start with action.On the subject of ―smart‖, if you’re familiarwithorganizational development you would know that objectives should beSMART:SpecificMeasurableAchievableRealisticTimeboundLet’s say your goal is to establish a fair trade shop selling products from Africa, starting withcoffee, and then one of yourmain objectives would look like this:Identify 20 cooperativesproducing fair trade coffee in East Africa by September 2010―Identify‖ is a nice, strong actionverb to begin with.But is this a SMART objective?Let’s see.Specific? Yes. In other words, the opposite of vague. We identify the number of cooperatives,the location and the date.We will know if we do not meet this objective.Measurable? Yes. ―20‖ and ―September 2010‖ are very measurable objectives and we willknow absolutely whether wemeet these or not. There is no scope for ambiguity.Achievable? This is more subjective, but if it’s April now, this is certainly achievable. (Thiswork is not for the lazy.) 20might be pushing it, though. We might have to revise this objective.Realistic? A goal might be achievable, but you need to ask if you have the resources—technical,financial, human—torealistically do it? If your objective is to identify 20 cooperatives and youhave no access to the internet, a telephone or afax, then it’s probably not realistic. If you do,however, then it is a realistic objective. When you’re writing an objective,be honest with yourself about your limitations and abilities. If you need help, seek it.Time bound? Yes. This means you put a date on it. Our objective is beautifully time bound andwe will certainly know if,when September rolls around, we have not met it.So, you have goals and your SMART objectives. Your goals will be few and your objectives willbe many—and SMART!Try applying the SMART formula to your own organizations objectivesand see if there are ways you can refine them to beSMART.Doing good takes more than goodintentions; it takes a lot of bad-ass planning too.We could also put it like this:―Goals are thethings your NGO will do in the medium to long term to achieve its mission, while the objectivesare theimmediate and ongoing actions you will take to achieve your goals.‖So, let’s look at this again.Goals: The ―What‖ you plan to achieve 15
  16. 16. Objectives: The ―How‖ you plan to achieve it. Be SMART.These first two steps are useful forstarting an NGO or non-profit anywhere, not just Ghana or Africa.The next steps will relate specifically to Ghana. 3. Set up a Board of DirectorsNow that you have outlined your vision and mission, and hopefully set some realistic goals withSMART objectives, the nextstep in starting an NGO in Ghana is to set up a Board of Directors.The Board of Directors serves as the governing body of your NGO. You can instate a maximumof five individuals. Ideally,they will share your vision and mission. These individuals should beexperienced and have skills to supplement your own sothat the NGO can achieve its vision andmission.The size and structure of the Board of Directors and its composition may changedepending on the needs and priorities ofyour NGO as time passes.Your Board of Directors is expected to perform the following functions:· Hire and supervise the Executive Director of your NGO· Develop and approve budgets· Develop policy· Champion the cause of your NGO· Represent your NGO to the larger community· Mobilize funds for your NGOThey can perform any other function that you deem fit for them. 4. Draft a constitutionAfter setting up your board of directors, to establish an NGO in Ghana you must create aconstitution. The constitution is aset of self-imposed governing principles by the NGO andtherefore, must be consistent with the specific needs of your NGO.The constitution stipulates specifically how your NGO will be run. It determines the structure,roles and responsibilities ofthose involved, and organization of your NGO. It also guides yourorganization’s operations and activities. It should beclearly written, deliberately structured andbe up-to-date to meet the needs of your NGO.The constitution will guide the behavior of all staffand members of your NGO, including the behavior and actions of theBoard of Directors and theExecutive Board. Each member of your organization must have a copy of the constitution ofyourNGO for reference purposes.Constitutions vary according to the specific needs of NGOs,however the following list is a guide of commonly includedelements· Official name of your NGO· The vision/mission and goals/objectives· Registered office· The programme areas· Members and qualifications and length of memberships· Board size, responsibilities, structure· Structure of board meetings 16
  17. 17. · Committee Structure· Executive positions and functions and procedure for dismissal· How your NGO is funded· How funds are applied· Amendment procedure for the amendment of the constitutionYou can appoint a constitutional committee to draft the constitution and submit it to the board ofdirectors and executiveboard for approval. Once approval is given, the constitution becomes theover-arching standard by which your NGOoperates and regulates its activities, behavior andactions of all its members, including the board of directors and theexecutive board.It is importantfor the constitutional committee to do close consultation with the board of directors, theexecutive boardand the broad-base membership of your NGO to reduce the risk of disapproval ofthe drafted constitution.It is wise to include a review of your constitution in your annual planningprocess so that you can adapt your activities to the needs of your NGO. 5. Register your NGO in GhanaThe important first four steps have been taken to profile the NGO.1. Develop vision and mission2. Set goals and objectives3. Set up a Board of Directors4. Set up a ConstitutionRegister the NGO in Ghana.NGO registration laws differ from country to country. Since we’re looking at Ghana, let’s nowtake a look at the legalrequirements and the registration steps for NGOs in Ghana.It’s a two-stepapplication process. The first step involves applying to the Registrar General’s Department. Thesecondstep involves applying to the Department of Social Welfare. 1. Applying to the Registrar General’s DepartmentCertificate to Commence Business and Certificate of IncorporationThe first step in the NGO registration process is to obtain a Certificate to Commence Businessand Certificate ofIncorporation.Purchase the NGO registration form at the Registrar General’sDepartment in Accra or at the regional post offices outsideof Accra. The current cost of the formis nine Ghana Cedis, fifty Pesewas (9.50). Please note here that there are differentregistrationforms for registering different organization types. NGOs must pick the form marked ―TheCompanies Code,1963 (Act 179), Regulations of a Private Company Limited by guarantee.‖Fill the formNext, fill in the required information in the appropriate spaces on the form. Be sure to takeenough time to do thiscorrectly. Most importantly, it must be typed on a type-writer, not acomputer. The trick is to make photocopies of theform and fill it out with ink, and then submit 17
  18. 18. that photocopied, handwritten form with the original form to a typingprofessional to type thedetails in the required spaces with a typewriter on the original, using the copy as a reference.Typewriting services are available for a small fee at post offices. If you’re lucky enough to havea typewriter lying around,go for it (and set up a small side business for NGO registrationapplicants).Some of the information that the registration form requires include:a. The name of NGOb. The objectivesc. The first members of the Executive Council or Executive Board. The number must not be lessthan two persons andnot more than twenty personsd. Particulars of Directors and Secretary, which include their names; nationalities; usualresidential addresses;business occupatione. Name and address of Auditor. If you don’t have an Auditor, don’t worry because the Registrarwill provide you withone upon approval of your applicationf. Address and P.O.Box of registered office; principal place of businessIf in doubt or confused, contact the Registrar General’s Department or the National Board forSmall Scale Industries at theregional levels for assistance.After filling the form, submit it to the Registrar General’s Department together with theregistration fees. The currentamount is 250 Ghana Cedis. They will issue the certificate tocommence business in about two weeks. It takes aboutanother week to get the certificate ofincorporation.2. Applying to the Department of Social WelfareNGO Status ApplicationAfter securing the certificate of incorporation from the Registrar General’s Department tooperate as a company, it’s timeto apply for NGO status from the Department of Social Welfare.The Social Welfare Department is the regulator of NGOs in Ghana and is therefore mandated toissue certificates ofrecognition to organizations to operate as NGOs.The requirements for registering an organization with the Social Welfare Department for NGOstatus have to be submittedto the national office of the Department in Accra and the approvedfees paid in full.· Certificates of Incorporation and to Commence Business from the Registrar General’sDepartment· Application letter on organization’s official letter head addressed toThe DirectorDepartment of Social WelfareP.O.Box M. 230Accra, Ghana· Organization’s constitution· NGO profile form 18
  19. 19. · Social investigation reportBoth the NGO profile form and social investigation report will be provided by the SocialWelfare Agency near yourorganization’s location· A recommendation letter from the District, Municipal or Metropolitan Assembly in which yourorganization is located· Any brochure or publication of your organization. This could be your organization’s profile,which talks about yourvision, mission, goals and objectives, your programme areas, your boardof directors, your staff and any otheruseful information about your organization.Three copies of an endorsement letter from regional office of Departmental of Social Welfare.The Department ofSocial Welfare has offices in all the regions of Ghana.It takes about one month to get the NGO status certificate.Now, you’re registered!HOW TO WRITE A PROPOSAL FOR FUNDING A PROJECTThe Style of a ProposalThe basic writing style of a proposal is the same for any type of technical writing. For proposalsto be effective try to follow these tips: State the purpose clearly at the beginning of the proposal. State the background information the reader/funder/investor will need to understand your proposal. Use a language that everyone can understand. Use short sentences that are clear and to the point. Make sure that your ideas are not hidden between unnecessary words. Make sure that the reader has all the important information needed for the final decision.Proposals will either be accepted or rejected. Obviously, you want your proposal to beaccepted. To help make this possible, follow the six steps listed below. 1. Your proposal should define the problem and state how you plan to solve the problem. Your proposal should assure your readers/funders that you can solve the problem effectively. Everything in the proposal should revolve around the problem and an effective way to solve it. 2. Do not assume that your readers/funders will believe your solution is the best. The purpose of your proposal is to convince your readers/funders that your solution is the best. You should not be over confident that they will approve of your solution. Do your best to look at the proposal and solution from the readers point of view. 3. Your proposal should be researched thoroughly. If possible, you should provide readers with examples and facts. These items usually make your proposal more meaningful and convincing. Try to keep your opinions out of the proposal. Opinions are not facts, and 19
  20. 20. most readers will not support them. The best advice is to research other articles and proposals on your topic. You can always include this information in your own proposal.4. Your proposal should prove that your solution works. Make sure that your solution is possible. You should include an analysis of your plan and possible results of your solution. Try a pre-test of your solution to see if it works. You may need to revise your solution before submitting your proposal.5. Your proposal should be financially feasible. Think about the finances of the company or person to whom you are writing the proposal. Make sure that they can afford the solution you are proposing. Make sure to explain why your solution would be worth their time and money.6. Your finished proposal should look attractive. The finished proposal should be as perfect as you can get it. This includes the overall appearance of the proposal and the content inside the proposal. 20

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