This document outlines a business plan for Pochampally Chenetha Kalanetha (PCK), an organization that aims to improve livelihoods for poor families in weaving villages in Andhra Pradesh. PCK will work with 2500 poor families over 3 years, building collectives, providing access to funds and markets, and supporting experimentation. It seeks 30 million rupees in equity, loans, and grants to scale its operations and deliver increased incomes and savings to target households while generating sustainable revenues through service fees and loan interest.

1. Srijan Microfinance Business Plan Competition Final Round Presentations, 3 July 2008 Pochampally Chenetha Kalanetha (start up) Pochampally Chenetha Kalanetha Collectives Business Plan (2008 -2011)

2. Overview Entrepreneurs’ profile Business Proposition Financial Analysis Management and Human Resources

3. Entrepreneurs’ Profile

4. Entrepreneurs’ Profile G Muralidhar – Project Lead Murali Vepoor – Project Coordinator Supported by a multidisciplinary team with 100+ person years of experience in livelihoods domain Motivated by a desire to apply the livelihoods principles and interventions for the benefit of the poor and the marginalized. Familiar with most of the weaving clusters in and around Andhra Pradesh. Associated with the work of several NGOs and weaver leaders in Pochampally cluster.

5. Entrepreneurs’ Profile G Muralidhar – Project Lead 20 + years of experience as Development Management Professional; Livelihoods Thought Leader Intense exposure and experience in diversified livelihoods portfolio – NTFP, Dairy, Oilseeds, Paddy, Handlooms, Watershed Development, Tribal Development etc. Instrumental in linking collectives with markets Core competency in building/nurturing/ supporting people and organizations at various levels, that work with the poor Specific experiences include: State Project Advisor, Livelihoods - SERP Member of the core team of NDDB-MIO

6. Entrepreneurs’ Profile Murali Vepoor – Project Coordinator 13 + years of experience in working with People’s Projects like Watersheds, UNDP, Velugu/IKP, NREGA etc.; People’s Projects Facilitator Core competency include participatory methodologies, CBO visioning and strategic planning Specific experiences include: collectivizing the poor producers in Mahabubnagar collectivising the poor in Pochampally and coordinating the ETP Project, Defluoridation plants and Zero-waste planning

7. Akshara Akshara Network is a not-for-profit development support organization initiated by practicing development management professionals to fulfill the need for affordable and timely professional support to individuals and organizations in the development sector. Key Achievements – Outreach 20+ million poor families 10000 + inducted into livelihoods thought & practice Worked with 100 + organizations Worked in 12 States in the country

8. Business Proposition

9. Business Concept Pochampally Current Reality Weaving cluster Not remunerative for Weavers Weaving is one of the livelihoods Push & Pull migrations are prevalent Non-weaving communities into weaving Movement from Cotton to Silk

10. Business Concept Livelihoods Framework Livelihoods is the Play of Six Capitals (natural, physical, social, human, financial and spiritual) towards Four Arrows (income, expenditure, employment and risk) within Four Contexts (ecological, techno-economic, distribution and income-expenditure pattern)

11. Business Concept Proposition Work with the entire poor in the village and not just with poor weavers Solution through Pochampally Chenetha Kalanetha Enhance capacities of the poor to place them on the cutting edge of the market; Build enabling infrastructure for the poor including collectives; and Facilitate improved access to funds and various linkages for the poor

12. Products and Methodologies Pochampally Chenetha Kalanetha offers the following products/services – Promotion of in situ experimentation – to bring out newer designs and value added products. This initiative will help move the artisans towards the right side of value-chain Building Collectives of the poor – to collectively manage costs and risks and to benefit from scale in procurement and sales Access to leverage fund and linkages – to enable poor to break free from existing supply channel web

13. Products’ Road Map In situ experimentation – Collectives will take up experimentation Gurus will be identified and oriented Gurukulams will be set up Risks and costs will be supported 10 innovations in 3 years Collectives – Geographic/Product specific Collectives (2500 members) Managed by professionals hired by Collectives Handholding support by PCK initially Funds & Linkages – Rs.12.5 Million Leverage Fund to Collectives for meeting members’ credit and working capital needs Rs.1.0 Million Risk fund to absorb risks in experimentation Convergence, Bank Linkages, backward and forward linkages for Collectives

14. Areas of Operation Geographic Outreach in coming 3 Years – 50 villages in Pochampally cluster

15. Target Market and Customer Base Target Market – The Poor in the weaving villages of Pochampally cluster (including silk and cotton weavers, non-weaving artisans and other poor practicing other livelihoods) – 25000 families Customer Base - For the plan period 2008-2011, the outreach will be 2500 poor families, of which weaving families will be more than 50% Competitive Analysis – Currently there is no service provider offering end-to-end (production to market) integrated services like PCK In weaving villages, most organizations work with only poor weavers but not with poor in general. Inclusive approach is absent which is the unique strength of PCK

16. SWOT Analysis Strengths Strong team with intense and wide development experience Established experience in weaving villages Partnerships Weaknesses Limited rapport with other villages in Pochampally cluster Limited exposure to marketing channels like e-marketing etc Threats Artisans feel insecure to lose existing trade relations Traders might engage in unhealthy competition Opportunities Recognized GI Pochampally - a recognized brand Niche market is not saturated yet

17. Social Impact By the end of the plan period – Collectives servicing 2500+ families will have turnover of Rs.35+ Million 5 functional outlets, independently managed by the collective 10 design and process innovations tried out by the community in various livelihoods Rs.2000 savings and Rs.10000 increase in income per target poor household Access to cost-effective financial services Significant risk bearing capacity of members

18. Financial Analysis

19. Growth Projections In three years: Coverage: Families  2500 Company Revenue: Rs.3.4 Million/year Collectives’ Turnover: Rs.25 Million/Year Additional benefit to members: Rs.25 Million/Year In the long-run (in a decade): 50000 families Company Revenue to cross Rs.10 Million/year Collectives’ Turnover to cross Rs.500 Million/year

20. Growth Projections (Rs in Million) 48 21 ROA % - Company + Collectives 144 108 SROI 10.7 10.7 10.7 8.5 5.5 Total Grants (cumulative) 19 4 Return on Assets % - Company Particulars 2008-09 2009-10 2010-11 2011-12 2012-13 INR INR INR INR INR Total Income 0.1 1.7 3.4 5.3 9.3 EBITDA (Earnings before Interest, Tax, Depreciation, Provisions) -9.1 -3.4 -1.5 2.5 7.0 PAT -9.2 -4.5 -2.7 1.2 5.6 Total Shareholders Funds (at-the-end-of-the-year) 8.8 8.8 8.8 8.8 8.8 Total Debts (end of the year) 0.0 10.0 10.5 10.5 10.5

21. Financial Ratios 8.75 Million Equity Requirement (INR) 10.70 Million Grant Requirement (INR) Particulars Current (or 2008/2009) 2011/12 (Projected) 2012/13 (Projected) Turnover Company (INR Million) 0.1 5.3 9.3 Turnover Collectives (INR Million) 1.0 58.5 108.0 Turnover Company + Collectives (INR Million) 1.1 63.8 117.3 Operating and administrative expenses/average gross turnover (%) – Company/Company + Collectives 9200/837 53/4 25/2 Profit after Tax / Gross Turnover (%) Company/Company + Collectives -9181/835 23/2 60/5 Return on Assets (ROA) % - Company/Company + Collectives 4/21 19/48 SROI % 108 144 Debt to Equity ratio 0 1.21 0.80 Debt Requirement (INR) 10.55 Million

22. Management and Human Resources

23. Management and Human Resources Management Committee (5+2) (for review, e-support, finance and process support) from Akshara Project Lead Mgmt Oversight Project Coordinator COO/Team Leader Project Support (15) (for facilitation, documentation, resource persons) from Akshara Project Staff (16) Resident Manager Livelihoods & Marketing Managers Executives Accountants Other Staff Governance & Staff for Collectives Management

24. Way Forward For the interventions to evolve on a desired scale and deliver results to the 2500 Poor households, Pochampally Chenetha Kalanetha seeks – Rs. 30.00 Million over a period of 3 years as below: Rs. 7.75 Million as Equity from Venture Capital Rs. 10.55 Million as Loan from Venture Capital Rs. 10.70 Million as Grant The Loan shall be repaid over a period of 5 years from revenues generated through: Service charges from collectives Interest on funds given to collectives

25. Thank You Pochampally Chenetha Kalanetha c/o Akshara Network HIG II B 25 F 6 APHB Colony Baghlingampally Hyderabad – 44, Andhra Pradesh. G Muralidhar – 9394843008 [email_address] , [email_address] Vepoor Muralidhar – 9849930037 [email_address] www.kalanetha.com www.aksharakriti.org