Analyzing a Businass Plan - RUMA

On our lecture on business planning we had an assignment of analyzing a business plan, and for this post I'm going to analyze the Indonesian based Social Business RUMA.

Having won the first prize of the Harvard Social Enterprise “Pitch for Change” competition, the acronym that gives name to this social business literally to Your Micro Business Partner. Through their business model they pretend to empower poor women by supplying them with a kit that enables them to start their own micro franchises hence becoming micro-entrepreneurs.

Using the strucutre seen during the lecture I'll try to make the analysis:

What?

Most of the time when poor people ask for a loan, they fall into a vicious cycle of debt. This is often caused by the way the money is spent after the loan is granted. No money is generated back so, in order to repay another loan has to be made. The RUMA business addresses this problem through the lending of Microfranchises, in their own words, they lend businesses to generate money.

Literally called a Business in a Box this micro-franchises provide all the tools and training required for selling electronic airtime minutes through mobile phones.

Who?

Knowing that the mobile phone industry has a high penentration on Indonesia, RUMA partnered with the Grameen Foundation as well as with Qualcomm to put this business into work. The Grameen Foundation provided the initial investment funds through its Pioneer Fund, as well as technical assistance that helped RUMA to build its initial operational framework (which includes technology systems and human capital). Qualcomm supplied the technological expertise on mobile phones through its Wireless Reach initiative.

How?

In order for RUMA to be a successful business they stipulated that the revenues will come from selling franchise kits that will be leased to the borrower by the financial institution, as well as for a margin obtained for each airtime sale. In that sense, the borrower of the microfranchise will use the revenue obtained to repay their loans. The estimated profit for the borrower is approximately $1/day. This business defines the poor as people as those living with less $2,5 a day (World Bank poverty line), so a steady $1/day supposes a 50% overall increase.

For measuring their results, RUMA chose the Grameen Foundation's Progress out of Poverty Index (PPI) since t's country specific and it's based on a ten-question survey of readily identifiable indicators.

As for their fanantial sustainability, RUMA plans to break even within its first 2.5 years. In order to reach that goal they need to empower 5,000 of the poor and poorest by August 2011, having as a target to reach a 70% of people below the poverty line.

RUMA in numbers (current situation).

At this point, Ruma has:

• Created more than 600 new micro-business.
• 100% profitability for the micro-business owners.
• 97% of owners are women.
• 68% of business owners are below the poverty line ($2,5/day)

They also pretend to develop and deploy new business kits that deal with medical products and services, education and training, trade and distribution, and agriculture and fisheries.

For more information I leave a link were you can download a through presentation

Ruma Business Model Presentation

Working Wikily - Social Change with a Network Mindset

While browsing the web trying to find some business plans to analyze for the class, I stumbled upon this blog. Working Wikily.

The blog was created by the Monitor Insitute, which is an entity that aims (as they would say in their own words) "to help innovative leaders develop and achieve sustainable solutions to significant social and environmental problems". They do this by giving consultancy, serving as a think tank of new trends, and being an incubator of new approaches and ideas.

The Working Wikily blog has the purpose "of providing practitioners in the social sector with a filter for the events that are pushing the field towards a more networked form of work and a perspective on how and why those events are unfolding".

In our case, this becomes relevant since we are doing a Master in Design For Social Business. We work inside the social sector, and the first part of this module was about setting a collaborative environment in order to approach any project in general (in this case our own experience of learning what is social business).

Networking is working in collaboration with others, building channels in which relationships are established and new ideas and ways of working are bred. This blog contains a lot of relevant articles, resources, and links that we may find useful in this new adventure we are taking part of...

For starters I leave you with a link where you can download their paper Working Wikily 2.0 in which they create the whole frame set for this approach to social innovation.

Enjoy!

The emergent world we live in

When the telephone was rolled out as a commercial product, AT&T spent a few decades trying to persuade its customers not to use it to call their friends and families. Edison thought the phonograph would be used to record last wills. Gutenberg thought he was gong to print Bibles and indulgences to add to the splendour of the Church, and could not have seen the printing-press enabled Protestant Reformation coming. Innovation is not just about new gizmos. It is about what people decide gizmos are.

In this lecture, I offer a complexity perspective on innovation. I argue innovation is emergent; it happens in cascades; it is inherently unpredictable; it is sparked in the context of relationships, not in the mind of lone inventor. Furthermore, I argue that social innovation has just the same characteristics as vanilla technical innovation. Enjoy.

Social business in Europe: the big picture

Social business in Europe: the big picture

Keeping in the background the structure of a business plan – covered in last week's lecture, the fourth of my module — we now begin to build a strong case for great social business ideas. In lecture number five I argued that rising costs of welfare are forcing every country in the world to rethink their welfare systems. Europe, where the welfare state is most advanced, has the most redesign to do. This is a change of historical proportion, and European decision makers feel it is urgent to take action. Everywhere social entrepreneurs are expected to come up with solutions to re-engineer the welfare state (but also other areas of heavy government intervention, like sustainability, mobility and energy issues).
Consistently with expectations, Europe is bracing to make serious investments in these solutions, and this presents a major opportunity to social business. The assignments in my last slide are going to be carried over to next week, as this week students are going to be working on an entry to the competition for social business ideas proposed by Tiago and agreed upon by everyone.

about cooperation _ week two

A team consists of…

… a small number of people with complementary skills who are committed to a common purpose, performance goals, and [a common] approach for which they hold themselves mutually accountable. (J. Katzenbach & D.Smith)

The first thing we pointed during last week class was that, even if we work as a group pursuing the same goal and sharing similar interests, we also are different and independent human beings, with various way of thinking and approaching work and projects.

From this perspective becomes really clear the reason of having such a platform as a blog; a choral reality in witch every one of us can be considered an unique voice that can share ideas, thoughts, news or complains.

The idea of using on on-line platform as a new interaction tool between us students and teachers it’s real interesting, and, speaking of Design I think that interaction can be considered a core issue, that's why we have to figure out the best way of using these new tools we are discovering.

In our particular situation we are trying to face an on-line interaction more than an off-line one for the first time.

I think that we are facing a new way of collaborating that potentially can give us competitive skills in the world of social business.

Learning to project and to use properly a collaborative environment could give us the chance to start a way better and faster collaboration between us thanks to such tools as videos, voice messaging (considered into the sphere of the synchronous communication ) or emails and shared files ( considered into the sphere of the asynchronous communication ), and could also help us in the achievement of an higher productivity in terms of final results.

Finally we don't have to forget the power that an on-line platform can have; It can be not only about us as studets or teachers, but also a point of interest for every other person interested in social business or design.

BoP Protocol & Design related concepts

D4SB Concepts to BoP Protocol

View more presentations from Oscar Pozuelos.

As you all might already know, we had this assignment due for last week.

In brief we discussed what we had read the 2nd BoP Protocol (Simani, E. & S. Hart) as well as the article on Theory Construction on design research: approaches, and methods (K. Friedman).

We tried to create some common ground for both Design and Social Business in order to find what we thought were the difference and similarities between the two. Once we had this common ground we tried to apply concepts given in class (concepts like future, opportunity, resorces, solution, etc.) to the 2nd BoP Protocol process overview (pyramid).

We still it might need a revision, so I post it here in order for you to have it so we can discuss it later and create a more complete and rich presentation.

Cheers!

Design For Social Business Mind Map

Hi everyone,

How cool is this? We can even have our mind maps embedded on our blog!

Ok so here is the plan: I think we should refer to this map every time we have doubts or even get lost. It is a very complex world and this will not only help us keep track but also if we continuously update it with our latest discoveries, by the end of the master it'll be pretty complete.

What do you think?

Chulha Stove: a really interesting design project

Nice link in www.designboom.com about this project made by Unmesh Kulkarni and Praveeen Mareguddi for Philips Design