Charter School Association Myths and Science of Sustainability

1,158 views

Published on

Creating Sustainability
The Science and Myths of Building High Performance Non-Profits by E. Ted Fujimoto, President
Landmark Consulting Group, Inc.

Published in: Economy & Finance, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,158
On SlideShare
0
From Embeds
0
Number of Embeds
23
Actions
Shares
0
Downloads
15
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Charter School Association Myths and Science of Sustainability

  1. 1. LET YOUR NON-PROFIT GROW Creating Sustainability The Science and Myths of Building High Performance Non-Profits E. Ted Fujimoto, President Landmark Consulting Group, Inc.
  2. 2. LET YOUR NON-PROFIT GROW
  3. 5. “ Sustainability” LET YOUR NON-PROFIT GROW Earned Revenues Philanthropic Funding Your Mission Your Core Operations
  4. 6. “ Sustainability” LET YOUR NON-PROFIT GROW Core Operations Your Mission Opportunities Scaling Risks Philanthropic Funding Earned Revenue
  5. 7. “ Sustainability” <ul><li>Enough capital ($) generated from earned revenue to: </li></ul><ul><ul><li>Pay for core operations to fulfill mission </li></ul></ul><ul><ul><li>Surplus to pay for scaling, risks/mistakes, as well as new opportunities </li></ul></ul><ul><li>Dependency on philanthropic funding only for: </li></ul><ul><ul><li>Scaling, Risk Mitigation, and New Opportunities </li></ul></ul>LET YOUR NON-PROFIT GROW
  6. 8. “ Sustainability-Principle” <ul><li>Sustainability is about creating more “perceived” value by customers than the cost to operate that activity and business. </li></ul>LET YOUR NON-PROFIT GROW
  7. 9. “ Five Sustainability Killers” LET YOUR NON-PROFIT GROW
  8. 10. LET YOUR NON-PROFIT GROW Meet Mark <ul><li>Real estate agent </li></ul><ul><li>Mortgage Broker </li></ul><ul><li>Organize your move </li></ul><ul><li>Interior Designer </li></ul><ul><li>Home Insurance </li></ul><ul><li>Life/Health Insurance </li></ul><ul><li>Financial Advisor, Securities Broker </li></ul><ul><li>Tax Preparer </li></ul><ul><li>House cleaning </li></ul><ul><li>Yard Service </li></ul><ul><li>Pest Control </li></ul><ul><li>Auto mechanic </li></ul><ul><li>Windshield repair </li></ul><ul><li>Kids tutoring </li></ul>
  9. 11. LET YOUR NON-PROFIT GROW MYTH – To be a great Association, we must solve as many member needs as possible. To be a great Non-Profit, we must solve as many constituents needs as possible. To be a great CMO, we must solve as many of our school site needs as possible.
  10. 12. “ Hedgehog Concept” LET YOUR NON-PROFIT GROW
  11. 13. Association LET YOUR NON-PROFIT GROW Advocacy Events Services Products
  12. 14. Radical Idea Case Study LET YOUR NON-PROFIT GROW
  13. 15. How to LET YOUR NON-PROFIT GROW Core Operations: Membership Products & Services Events Marketing & Sales Finance HR Board State B-Member Council State A-Member Council State B Advocacy State A Advocacy State B – Unique Services/Support State A – Unique Services/Support CEO State B ED State A ED VP/COO State A Association State B Association
  14. 16. CMO LET YOUR NON-PROFIT GROW
  15. 17. LET YOUR NON-PROFIT GROW MYTH – The association will be a near-automatic first choice by members for solutions . MYTH – The non-profit/CMO will be a near-automatic first choice to receive help for customers/schools.
  16. 18. “ Survey Myth” LET YOUR NON-PROFIT GROW
  17. 19. “ The Perfect Fit” LET YOUR NON-PROFIT GROW Marketability Significant Value Profitability Do charters perceive a huge need and want to buy a solution? Does the business model support creating short-term and long-term profit? Does the solution save charters significant costs and/or create huge additional value? What we can be deeply passionate about? What we can be the best in the world at? Passion Expertise
  18. 20. “ How To Get Real Market Input LET YOUR NON-PROFIT GROW Be Humble Your best ideas <ul><li>Talk to 50 customers </li></ul><ul><li>Open conversation of biggest issues they feel like they need help with </li></ul><ul><li>Association won’t be able to solve all their issues </li></ul><ul><li>Which issues do they think the Association is or can be capable of providing the most value </li></ul><ul><li>One on one, small groups </li></ul><ul><li>Validate needs and perceived value with broader customers </li></ul><ul><li>Larger groups, survey </li></ul>
  19. 21. Value Principle <ul><li>Perceived value is what counts </li></ul><ul><li>Too expensive to change perceived value </li></ul><ul><li>Customer does NOT have to purchase with the “right motives” to receive benefits/value </li></ul><ul><li>Your offering does NOT need to be a complete solution to be the right product </li></ul><ul><li>Thirst/Desire/Comfort is why people buy from one versus another </li></ul>LET YOUR NON-PROFIT GROW
  20. 22. Product Mix LET YOUR NON-PROFIT GROW Entry Entry Mid-Level/Partial Solutions Mid-Level/Partial Solutions Big Complete Solutions Entry Entry Mid-Level/Partial Solutions Big Complete Solutions Customer Perceived Needs
  21. 23. “ Myth of Earned Revenue” LET YOUR NON-PROFIT GROW $1M additional expense to generate $1.4M in earned revenue (71% profit margin) Core Operating Base Line
  22. 24. “ Myth of Earned Revenue-CMO” LET YOUR NON-PROFIT GROW Need as much contributions as they did at the beginning or more Number of Schools
  23. 25. “ Myth of Earned Revenue” LET YOUR NON-PROFIT GROW MYTH – More earned revenue = less philanthropic funding needed
  24. 26. Earned Revenue Principle LET YOUR NON-PROFIT GROW Activity <ul><li>More perceived value than actual cost </li></ul><ul><li>Generates more cash than it costs </li></ul><ul><li>Generates margin – for risks, growth, and opportunities </li></ul>Activity Activity Activity <ul><li>Examples: </li></ul><ul><li>Services – 2-3x times cost = minimum 30% margin </li></ul><ul><li>Products – higher volume = 5-10% margin </li></ul>
  25. 27. Cash Flow – Generating more cash inflow than outflow LET YOUR NON-PROFIT GROW Biggest enemy of cash flow is TIMING! Q1 $100K Expense Q2 $100K Expense Q1 $0K Revenue Q2 $0K Revenue $ (100K) $ 0 $ 100K $ 200K $ (200K) $ (200K) $ (100K) $ 100K Q3 $100K Expense Q4 $100K Expense Q1 $200K Expense Q2 $300K Expense Q3 $400K Expense Q3 $100K Revenue Q4 $200K Revenue Q1 $400K Revenue Q2 $600K Revenue Q3 $800K Revenue $ (100K) Period $ (100K) Cumulative $ 300K $ 400K $ 400K $ 800K Year 1 Year 2 Planned Launch Profitable Cash Positive
  26. 28. Cash Flow – Generating more cash inflow than outflow LET YOUR NON-PROFIT GROW Biggest enemy of cash flow is TIMING! Q1 $100K Expense Q2 $100K Expense Q3 $100K Expense Q4 $100K Expense Q1 $0K Revenue Q2 $0K Revenue $ (100K) $ 0 $ 100K $ 200K $ (200K) $ (200K) $ (300K) $ (100K) Year 1 Year 2 Planned Launch $ 100K $ (100K) $100K Expense $200K Expense $300K Expense $100K Revenue $200K Revenue $400K Revenue $600K Revenue $800K Revenue $ (100K) Period $ (100K) Cumulative $ 300K $ 400K $ 400K $ 800K Profitable Cash Positive
  27. 29. Cash Flow – Generating more cash inflow than outflow LET YOUR NON-PROFIT GROW Biggest enemy of cash flow is TIMING! Q1 $100K Expense Q2 $100K Expense Q1 $0K Revenue Q2 $0K Revenue $ (100K) $ (100K) $ 0 $ 50K $ (200K) $ (400K) $ (300K) $ (400K) Year 1 Year 2 Planned Launch $ (350K) $ (100K) $400K Expense Q3 $100K Expense Q4 $100K Expense $100K Expense $200K Expense $300K Expense $100K Revenue $200K Revenue $400K Revenue $600K Revenue $800K Revenue $ (100K) Period $ (100K) Cumulative $ 200K $ 400K $ (150K) $ 800K Profitable
  28. 30. LET YOUR NON-PROFIT GROW Team Team Team <ul><li>Timing </li></ul><ul><li>Commitments </li></ul><ul><li>Volume </li></ul><ul><li>Skill/Exprience </li></ul><ul><li>Staffing </li></ul><ul><li>Rhythm </li></ul>Advocacy Business Event Business Procurement Business Consulting Business Etc Business Advocacy Business Event Business Procurement Business Consulting Business Etc Business
  29. 31. LET YOUR NON-PROFIT GROW Team Team Team <ul><li>Timing </li></ul><ul><li>Commitments </li></ul><ul><li>Volume </li></ul><ul><li>Skill/Exprience </li></ul><ul><li>Staffing </li></ul><ul><li>Rhythm </li></ul>CMO Advocacy Business Event Business Procurement Business Consulting Business Etc Business Advocacy Business Event Business Procurement Business Consulting Business School daily operations Business
  30. 32. LET YOUR NON-PROFIT GROW MYTH – Having smart/experienced people is enough to launch/operate multiple businesses.
  31. 33. “ In Action” LET YOUR NON-PROFIT GROW Organization Focus Business Team Business Team Team Business
  32. 34. “ Using Small Teams” LET YOUR NON-PROFIT GROW Each Business Team Team Leader (Owner – Accountable – Authority) Team Members – Resource Pool
  33. 35. “ No Silos” LET YOUR NON-PROFIT GROW Dependable Specific Deliverables Timelines Quality Levels Business/Team Business/Team Deliberate and Structured Relationships, Cooperation, Collaboration
  34. 36. Governance LET YOUR NON-PROFIT GROW Business Business Business Board of Directors Board of Directors Advisory Board Association Association Contracts Internal Staff A B C
  35. 37. LET YOUR NON-PROFIT GROW MYTH – Build it and they will come!
  36. 38. “ Know your customer” LET YOUR NON-PROFIT GROW
  37. 39. How to LET YOUR NON-PROFIT GROW <ul><li>Know how many have need </li></ul><ul><li>Create 100% awareness </li></ul><ul><li>7 multi-mode communication hits </li></ul><ul><li>Communicate value /benefits </li></ul><ul><li>Stay on message/Keep it simple </li></ul><ul><li>Create predictable rhythm </li></ul><ul><li>Use entry and up-sell opportunities </li></ul><ul><li>Build trust/credibility </li></ul><ul><li>Don’t wait for perfection </li></ul>
  38. 40. LET YOUR NON-PROFIT GROW
  39. 41. “ Generate Results” LET YOUR NON-PROFIT GROW 50% qualified lead rate 25-50% close rate
  40. 42. “ Five Sustainability Strategies” LET YOUR NON-PROFIT GROW
  41. 43. More than Sustainability Increased Capacity, Scale, Growth! LET YOUR NON-PROFIT GROW
  42. 44. LET YOUR NON-PROFIT GROW Discussion/Q&A E. Ted Fujimoto, President Landmark Consulting Group, Inc. [email_address] 415-963-4406 www.ConsultLandmark.org
  43. 46. LET YOUR NON-PROFIT GROW CharterConnect <ul><li>State Association </li></ul><ul><li>Advocacy </li></ul><ul><li>Events </li></ul><ul><li>P&S offerings </li></ul><ul><li>Visits/Meetings </li></ul>Charter School Leaders 100% Immediate Awareness Rapid, Personal, and Informed Communications to all your members Hi Joe, this is Gwen from the association…how are you? George wanted me to give you a quick call to let you know the bill AB 231 actually passed…this means $100 more per student next year…how do you like that? We thought you would love to know because I know you had helped us with your letter to Senator Brown.
  44. 47. LET YOUR NON-PROFIT GROW Thank you!!! E. Ted Fujimoto, President Landmark Consulting Group, Inc. [email_address] 415-963-4406 www.ConsultLandmark.org

×