Scaling Tips: Scaling Choices and Scaling Retail & Distribution Workshops, Impact Hub Stockholm, October 2015
Ruth Brännvall is the co-founder and CEO of Impact Invest Scandinavia, the first investor network in the Nordics focused on triple-bottom investments. Ruth has written several publication on strategic issues for social businesses, such as the handbook Toolbox for the social business. On 15th and 23rd October 2015, Ruth delivered two workshops on ‘Scaling choices’ and ‘Scaling distribution & retail’, where she shared with participants on the Impact Hub Scaling and BENISI programmes some of the key issues to think about when scaling their social enterprise. The discussion mainly revolved around the following issues:
Are you ready to scale? One of the first questions to consider before scaling is whether the timing is right for your organisation. Try a self-assessment test to evaluate your readiness for starters!
Suggested stepping stones to successful scaling include having a financially self-sustaining business model, sufficient market demand, resources and capacity, a sensible funding plan and a good assessment of external factors that may play out a role in our success.
Team is a key issue when you consider what your future organisation should look like: should the founders and team members be very similar to each other or complement each other? Although we might feel more comfortable with people that are similar to us, research shows that the best performing companies are the most diverse ones in terms of workforce.
Finding the right partners… When searching for partners, try to look beyond your common enthusiasm around the same issues. Get references, ask whether they are competent in doing what they are doing, find out whether they can help you with something you cannot do, understand if you will enjoy working together, make sure that they get something out of it too.
Partner or customer? When you want to work with the municipalities, for instance, are they your partners or customers? A customer buys while a partner might be investing time as well as other resources.
When choosing the distribution channels, it is important to segment your customers and find the right approach to reach different segments. Different approaches include the niche model where we address a focus segment and the segmented model, where we reach different segments at the same time with slight variations in our products and services.
Your customer relationships should match with the customer segments you are trying to reach. For instance, are you going to offer personal contact or automated services? You need to understand what your customers prefer! Can you tap into different types of communities that influence each others’ buying decisions: can you engage with the community, gain their trust and reach your targeted customer segments more smoothly?
Channels are all about ‘how’ we reach the customer! Awareness, evaluation, purchase, delivery and after sales. This is the mental process people go through all the time when making buying decisions and they need help in all stages. How can you get involved in all these ‘touch points’ to engage and maintain your customers?
Another question to consider is whether to sell directly or use intermediaries. Common models for social ventures include partnering with another organisation that have a network, micro entrepreneur or franchise model, and sales network of independent individuals.
Digging deeper into the social franchise model, we discussed the advantages and disadvantages of scaling through the franchise model. For more on that, please visit our blog entry on the “17 Things to Think About If You Want to Franchise Your Social Enterprise”.
Are you ready to scale-up your social business across Europe?
Then apply to Impact Hub Scaling and get support from mentors like Ruth Brännvall to grow your business internationally.
Author
Brenda Anne Ochala is a Communications Officer at SEI and is passionate about innovation and applying social entrepreneurship to solve the world’s social and environmental problems.