212 second street, suite 204 lakewood, new jersey 08701
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212 SECOND STREET, SUITE 204 LAKEWOOD, NEW JERSEY 08701
Lakewood Resource & Referral Center
The topics we’ll be covering
The Business Model – Why It’s Important
Expense and Cash Flow Management
Collaboration
Evaluation
Brief note before we start
All businesses , whether for-profit or non-profit
All strive to manage with efficiency and be positioned for
sustainability, growth and success.
Business is Business
The Business Model
Understanding the Business Model
WhoHow What
Expenses Revenue
The Business Model
What Are We offering
What is their mission What product or service do they Offer
Refreshing Drinks
Disaster relief assistance programs
High Quality Products for cheaper
Saving People money so they can live better
To Refresh The World
To Provide relief to victims of disaster
Who Are We offering this to
Who is our market
1. The Recipient2.The Sponsor
Two markets to understand
Two potential revenue sources
Provide programs for young people that build character, etc.
The RecipientThey charge a $15 Registration Fee
The SponsorThey provide a service to all sponsors looking to promote character building in Youth
Assessing Target Market
Psychographic information • Includes lifestyle data like hobbies, interests, opinions, etc.
Geographic information • Includes information about where the subject lives and where he or she purchases products and services. This can be as broad as the country or state in which they live, or as narrow as the county, city and neighborhood.
Behavioral information
• Includes information about how the subject uses products or services.
Benefit information
• Includes information about the perceived benefits the subject receives from products and services.
Demographic information • Includes age, gender, nationality (if necessary), etc.
How Can We Offer this
Physica
l Financial
Intellectual
Social
What resources are needed?
Manufacture
Distribute
Market
Office space
Personnel
Expenses
Program Expenses
Administrative Expenses
Fundraising Expenses
Revenue
The sponsor
The recipient of the offer
Education
Students
Educating American citizens
For the federal government
Revenue
$$
$$
Using the Mission statement as a guide for Growth
Mission – To provide love to the
animals of the universe
Love the Animals Corp
Offer - Feed the
ducks progra
m
Duck food foundation
Revenue
Offer - Feed the
Animals progra
m
Animal food foundation
By optimizing the efficiency of these five areas, an agency can position itself for substantial growth and sustainability
WhoHow What
Expenses Revenue
Cash flows & Expenses
$$$
Managing Cash Flows
Cash Revenues
Cash Disbursement
Cash Reconciliation
January February March
- Revenue from Sponsors- Revenue from services
- Rent- Utilities- Salaries
Opening Cash Balance+ Total Cash Revenues-Total Cash Disbursements = Closing cash balance
$50
$100 $200$150
$50$50
$0
$50
$50
$100
$50
$150
$50
$150
$150
$200
$50
$300
Managing Cash Flows
Projecting cash flows
Anticipated Revenue Anticipated Expenses
Risk Related to RevenueRisk Related to Expenses
Standardizing RevenueStandardizing Expenses
1
2
3
Managing Cash SurplusManaging Cash Deficit
•Pay Down Line of Credit•Invest in short term Instruments•Invest in liquid securities
•Obtain Short term loan / Line of Credit•Speed up collection of receivables•Liquidate investments•Increase fundraising efforts•Cut expenses
Rate of occurance x impact of the event = Risk
30% x 50% = 15%
Expenses
Program Expenses
Administrative Expenses
Fundraising Expenses
Managing Expenses
3 keys to Expenses Management
Taxes – understanding the exemptions
Reporting – understanding the requirements
Budgeting – understanding what is necessary
Use the cash flow
projections
Be thrifty
Use the business model to create an expenses guideline
Leveraging Resources
Leveraging Resources
Physical Social CulturalIntellectu
alFinancial
Agency Resources
•Financial Sponsors•Cash on Hand•Loans•Receivables
•Building•Websites•Computers•Desks
•Agency Image•Trust•Social Media
•Typically Includes patents•Community Insight
Collaboration
Collaboration
Cost Sharing
Making the Case for Collaboration 1+1=3
Expanded Solutions
Wider Target Market
Generates wiser decisions
Produces more durable decisions
Fosters action
Builds social capital
Fosters ownership of collective problems and resources
Promotes change
Other benefits of collaboratio
n
Collaboration
Population of City XYZ
Seniors HispanicAfrican American
White
Senior Agency
Hispanic Ageny
African American Agency
White Agency
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
PopulationExpensesRevenue
Minority Population
HispanicAfrican American
Hispanic Ageny
African American Agency
Combined Agency
0
20,000
40,000
60,000
80,000
100,000
120,000
PopulationExpensesRevenue
Independent Collaboration
Evaluation
Financial Statements
What are they?
Statement of activities
Statement of cash flows
Statement of financial
position
snapshot of the organizations business operations
snapshot of an organizations assets, liabilities and owner’s equity
snapshot of cash activity in operating, investing and financing areas
Financial Statements
Financial Statement analysis provides the quickest and most concise evaluation
Vertical Analysis
Horizontal Analysis
Provides a picture of
organizational efficiency
Provides a picture of the direction the
organization is headed in
Vertical Analysis
Provides a picture of
organizational efficiency
Revenues
Program Expenses
Gross Margin
Agency A Agency B
$100
$50
$300
50% 33%
$200
Gross Margin Percentage = (Revenue-Cost of Sales)/Revenue
Gross Margin reveals the proportion of money left over from revenues after
accounting for the cost of goods
Evaluation
Revenues
Expenses
Year 1 Year 2
$100
$50
$300
$200
Growth Rate = ( Year 2 – Year 1)/Year 1
Horizontal Analysis
Provides a picture of the direction the
organization is headed in
Growth Rate
%200
%300
Evaluation
Summing It All Up
The business Model
Collaboration
Managing the Resources
Managing the Cash Flows
Evaluation
THANK YOU!!
IDEAS &Q&A
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