The Divine Life Ventures Strategic Plan - Report Example

?Running Head: The Divine Life Ventures Strategic Plan The Divine Life Ventures Strategic Plan Inserts His/her Table ofContents 1- Executive Summary 3 2- Introduction 4 3- Background 4 4- Organizational mission, Vision, and Value Statements 5 5- Environmental Scanning 6 6- External Environmental Factors 6 7- Internal Strengths and Weaknesses of TDL Ventures 7 8- Recommendation for the Best Strategy 9 9- Implementation Plan 10 10- Objectives 10 11- Functional Items 11 12- Action Items 11 13- Milestones 12 14- Tasks and Deadline 12 15- Resource Allocation 13 16- Key Success Factors 13 17- Financial Forecast for the Company 14 18- Risk Management Plan 17 19- Conclusion 18 20- References 19 Executive Summary The Divine Life Ventures is a nonprofit organization that aims that providing excellent facilities to the physically disable specially the visually impaired people. The purpose of the organization is to provide blind people training so that they can live their lives independently. The main services offered by the organization are the transportation services, leadership training programs, and health style training. The main strength of the organization is government exemptions of taxes and attracting funding. The weaknesses include high operational cost and financial crisis facing the world today. The external environment will also affect the organization because of the cultural diversity of clients. The best strategy for The Divine Life Ventures is to focus on clients because this will attract more clients and funding from all social circles of the society. The main objective of the company is to emancipate people who are blind or of low vision from the dependence on the society. The functional tactics of the company will involve renting the building where operations of the company will be carried out and buying buses on installments for the transportation services. The action items include hiring the right people and marketing the company alongside with attracting funds. The milestone set by the company is to get at least 150 clients in the first year and then this number should reach to 400 in the next year. Number of fundraisers should also be around 60 to 70 every year. The minimum cash balance is expected to be maintained at $40,000 for the first 2 years. The major risk to the organization is the bank debt and the competition it can face from similar firms. Introduction The name of my organization is The Divine Life Ventures. This is a nonprofit organization that provides services for physically disabled people. The focus of The Divine Life Ventures is on people who are blind or have impaired vision. The main focus of the organization is to make the disable people strong enough so that they can live independently. The Divine Life Ventures will be a place where minds will be emancipated and clients will feel a sense of independence. The Divine Life Ventures will provide initially a transportation service, leadership training and development program, and healthy living training. All these services will help them achieve success in their lives. In this report a comprehensive environmental scan will be presented with regards to The Divine Life Ventures. The mission of the organization and its background will be discussed. A detailed implementation plan and a risk management plan will also be given. Company Background The Divine Life Ventures is a nonprofit organization therefore it is vital that management personnel are selected that have an experience in this industry. It is also important to choose people who can attract funding from the well to do factions of the society. People will only give their money for a service if they think that money will be used for a good cause and if they trust the people they are giving money. Therefore board of governors of the organization will include many prominent names like Steve Jobs, Bill Gates and movie stars. These people alongside with charity workers will be included in the board of governors. This board will elect a chief executive officer who will in turn select finance, marketing, HR, services and other heads. These people will be elected purely on the basis of their acquired skills. The public spokesmen of the organization will be a blind person so that funding can be attracted and true representation of the clients can be made possible. Organizational mission, Vision, and Value Statements Mission statement of the organization is very important as it provides information about what it does in one line. It is the framework within which strategies of a company are based (Hill & Jones, 2008).The mission statement of The Divine Life Ventures is ‘‘to help the disable become able’’. This statement tells in a few words the purpose of the organization alongside its main customers. Vision statement of the company provides an insight about the future plans of the company. It can be something that organization wishes to become in future. The vision statement of The Divine Life Ventures is “a world where physically disable are equal to physically able people”. Value statement of The Divine Life Ventures is “we believe in pro viding excellent services to our clients that will help them live independently in this tough world. Our core focus is on providing high levels of care to disable people and providing them training in different areas. We take pride in providing services to the disable because they are an important part of our society. We aim at honoring our commitments and our employees are driven with the passion for providing great care to our clients”. Environmental Scanning An environmental scan will be presented with regards to The Divine Life Ventures. In this section we will talk about the internal strength and weakness of the company. This will include analysis of external factors that have an impact on the operations of The Divine Life Ventures. Competitive position on the organization will also be discussed along side with future possibilities. External Environmental Factors There are many external factors that can have an impact on The Divine Life Ventures. It is important to understand these external factors and prepare accordingly. The most important external factor that will affect the company is the financial crisis staring the world today. Financial instability is pushing unemployment upward and companies are trying to save costs. In such times it will be very hard to collect funds for a nonprofit organization that is looking forward to start its operations (Tuckman, H. 1991). There will be no track record of the company so this will aggravate the problems. Governmental policies are also important for The Divine Life Ventures. Tax benefit given to nonprofit organization can help the company many folds. Government support can also help the company. Governmental grants can help the company expand its operations. Therefore governmental policies are also a major external environmental factor. The most important external factor for the organization will be cultural diversity. It is very important to do a cost benefit analysis that takes into account all the social costs involved in operating an organization. Culture is sometimes a major barrier in helping the blind and the disable. Different cultures have different ways of dealing with the people so cultural aspect must be kept in mind before designing transportation services and training programs for the blind and disable. It is important to manage diversity in today’s organization in order to function in a proper and efficient manner (Mintzberg, James, Sumantra, & Joseph. 2002). Internal Strengths and Weaknesses of TDL Ventures This section will identify and analyze the internal strengths and weaknesses of The Divine Life Ventures. Strength and weaknesses will help the management plan operations in a better way. Internal Strengths The main strength of The Divine Life Ventures is its power to attract funding. The company is for a good cause so it is more likely to attract funding from organizations and individuals. Charity work is appreciated generally by the society therefore attracting funds will be easier for TDL Ventures. The company also has designed services and programs that are aimed at freeing the minds of the blind and disable people, and pushing them to take that extra step through which they can spend their lives independently. Leadership programs are not offered by many organizations for blind people or people with any disability so this will be a differentiating factor of the organization. Another major strength of the company is the tax exemptions it can get. Lesser taxes can help the company financially. Moreover company can take audacious ventures because it is not focusing on profits and it has to break even only. Banks and other financial institutions can also give loans on flexible terms to TDL Ventures. This can help the company is its initial phase of operations. Internal Weakness The major weakness of the company will be its operational costs. It is important to understand that nonprofit organizations are trying to give services to the society. Their aim is not to earn large amount of profits. This is the reason why the focus in nonprofit organizations if usually on financial accountability rather than on performance (Maher, Stickney, & Weil. 2007, pp. 442). This means that accounting and auditing costs of the company will increase. This is also important to gain trust of the donors because they are the main source of revenue for The Divine Life Ventures. The organization will also have to hire skilled employees. This can be difficult because most people want to work with big names. It will be essential that good compensation packages must be offered to employees and then their performance should be evaluated critically. Employees should also be promoted on higher positions like for profit organization in order to motivate them to work harder. Compensation packages will increase the cost of the company significantly. There is a problem of performance measurement in nonprofit organizations and TDL Ventures will also face this problem. Because financial performance does not matters there has to be other metrics through which performance of the management can be evaluated. Only then any sort of improvement will be made. This can also be regarded as a weakness for the company. Recommendation for the Best Strategy The company should be to focus on long term goals. Short term problems will come but management should set its aim on long term success. The best strategy for the company should be to focus on clients. Blind and other physically disabled people should be given a sense of independence and only then the real aim of the organization can be achieved. Client centric strategy is the best for The Divine Life Ventures. By focusing on clients the company can attract blind people and that will automatically bring the funding. People want performance and when they will see that a social service organization is doing a good job then they will donate generously to the organization. Attracting clients will be a problem initially but this can be resolved through contacting various other nonprofit organizations. But once the company has a few clients then the entire focus should be on them and their needs. Another dimension of the strategy should be to keep all the activities and the routines flexible. Blind people are not all the same and it is not very easy to generalize their needs and desires. A flexible program would allow different kinds of clients to come to The Divine Life Ventures. An example would be to design the buses for the transportation services in a way that has single and double seats both. This will allow people who want to sit alone (usually individualist cultures) and don’t like touching to other people. Also there should be two seats arrangement for people who like to sit together and are more social (collectivist culture). In this way a flexible programs and services can be designed. The Divine Life Ventures should also focus on sponsorships because companies like to associate their names with social organization (Pearce & Robinson, 2003). Any kind of sponsorship can ease the financial burden of the company. Buses are a good way to advertise so this area can also be used to generate revenue. The focus of the organization should be to provide better and better services to its clients and for that funding is required therefore sponsorships should also be sought. Implementation Plan In this section we will present a detailed implementation plan of The Divine Life Ventures. This will include all the financials and budgets of the company for a few years and the goals and targets of the company. Implementation plan will throw light on how to achieve all those things that have been mentioned in the above sections. Objectives, action items, functional tactics, milestones, tasks and deadlines, resource allocation and key success factors will be discussed in this section. A risk management plan for The Divine Life Ventures will also accompany the implementation plan. Objectives The main objective of The Divine Life Ventures is to provide support and services to visually impaired people. Key objectives are given below: To emancipate people who are blind or of low vision from the dependence on the society. To develop a healthy life style for disable and given them opportunity to live independently To make the blind people able enough to achieve success in all walks of life. To provide leadership training to the visually impaired people. Functional Tactics Functional tactics for The Divine Life Ventures will involve decision making with regards to the services provided by the organization, the infrastructure of the organization, and planning of the activities for the disable people. First of all the company should start searching for a building for its offices and training programs. Initially buying a property will not be feasible for the company because it cannot incur such a huge cost when commencing its operations. Building should be arranged on rent so that costs can be reduced initially. Services provided by the company include transpiration services. For that purpose buses should be acquired. Banks should be used to finance these buses and initially 2 buses should be purchased on installments. These buses will provide services to the handicap people and will also generate advertising revenue. Revenues can be generated through private contributions, government funding and commercial activities (Froelich, K. 1999). Leadership training program, personal development program and healthy life style program should be developed by psychologist and medical doctors. Activities should be designed and supervised by experts because these are the core services given to the customers. Action Items Action plans will help the organization achieve its goal. Hiring should be started immediately and appropriate people should be appointed on key positions. Marketing is a very important element in nonprofit organizations and sufficient resources are required to make an impact through marketing (Kotler & Andreasen, 2000, pp. 264). Also funding should be attracted and members should be selected who can provide regular funding to the organization. Promotion of the organization is another thing that should be done by The Divine Life Ventures. People should be made aware of the services they offer and how beneficial they are to the society. A client base of at least 20 should be targeted in the first month. Organization should also arrange at least 25 fund raisers in its first quarter of operations. This will not only provide funds but will help increase awareness regarding TDL Ventures their services. Milestones The milestone that company should set for itself should be on a yearly basis. The company should aim at getting to at least 150 clients in the first year and then this number should reach to 400 in the next year. After that there should be a yearly increase of 250 clients. This is a long term plan and it focuses on clients only. The company should also own the building in which it is running its operations after 3 years of commencing its operations. This will be very tough as 3 years is a very small amount of time. This milestone is important because without owning property TDL Ventures cannot think of expanding its operations. The main clients are blind people so the target market is not very huge. In order to serve more clients the company will have to multiply itself and start operations in other cities. Also rental properties pose a lot of variable expenses. This is why milestone of owning a building is appropriate. The company should also aim at 60 to 70 fundraisers every year. This will generate a lot of revenue for the company and it will also market the name of TDL Ventures. Tasks and Deadline Tasks should be assigned on the basis of expertise of a particular employee. The organizational structure of TDL Ventures will be flat which means that a CEO will head all the departments directly. Finance, HR, Administration, Marketing, Services, and business development directors will be appointed by the CEO. They will in turn hire people who they think are capable to perform jobs. The services department will be the most important because it will design the leadership programs and other activities for the disable people. The deadline for hiring all the people should be2 month after hiring of CEO. All the people should know about their work in 2 months and then activities of the organization should be started. Resource Allocation Human resources of the company should be utilized to attract funding and clients. Initially all the employees should work together in groups so that initial targets for the company should be achieved. The department heads should lead the group and they should tell their team what to do. CEO should head the designing part of the services that will be provided to clients and should arrange funds for the company. He should also be present in any fundraiser so as to represent the organization. Financial resources of the company should be utilized in the fullest possible way. All the money which is at disposal should be properly recorded so that external audit can find no loop holes. This is important as people will not give their money to the organizations if they feel that the money is not used for a good social purpose. The finance department should be responsible for accounting of the transactions. Key Success Factors Key success factors of TDL Ventures include differentiation and innovation. The services that will be offered by the organization will be unprecedented in the nonprofit social service sector and will immediately attract attention of the people. Transportation services for blind and disable people is not something that is seen all over the country and this will be the differentiating factor of the company. Differentiation provides competitive edge to the company over its competitors even in the nonprofit industry (Barney, J. 2007).The leadership program of TDL Ventures will also prove to be an innovative step. An important success factor will also be the big names on the board of governors that will attract funding and gain people’s trust. Financial Forecast for the Company Forecasted Cash Budget for a Period of four years from the starting of the business: Particulars Year 1(in $) Year 2 (in $) Year 3 (in $) Year 4(in $) Cash balance(beginning) 50,000 40,000 40,000 42,355 Add: Receipts Voluntary receipts 2,50,000 2,70,000 3,24,000 3,95,280 Investment income 5,000 6,400 7,360 8,832 Incoming resources from charitable activities 1,62,500 2,08,000 2,45,440 2,84,710 Total Receipts (A): 4,17,500 4,84,400 5,76,800 6,88,822 Total Cash available 4,67,500 5,24,400 6,16,800 7,31,177 Less: Expenses Fixed Expenses 60,000 60,000 60,000 60,000 Variable Expenses: Costs of generating voluntary income 1,75,000 1,54,000 1,41,680 1,37,429 Fundraising costs 17,500 16,100 15,778 15,462 Services and Programs costs 4,12,500 3,63,000 3,23,070 3,06,916 Other expenses 7,500 6,900 6,417 5,903 Total Expenses (B): 6,72,500 6,00,000 5,46,945 5,25,710 Excess/deficiency of cash available (2,05,000) (75,600) 69,855 2,05,467 Financing: Borrowings 2,45,000 1,15,600 - - Payments - - (25,000) (1,30,000) Interest - - (2,500) (13,000) Total financing (C ): 2,45,000 1,15,600 (27,500) (1,43,000) Ending Cash Balance 40,000 40,000 42,355 62,467 The minimum cash balance is expected to be maintained at $40,000. Accordingly, in short of cash balance borrowings would be required. According to merit, experience of the candidates and their job profile the compensation packages should be allocated considering the limitations of the organization. Budget allocation for operating expenses, promotional expenses of the organization, different blindness integration program, advocacy for blinds and fighting for the civil rights of the visually challenged also finds a very important place in the balance sheet of the company. Break-even Chart: (the figures are in dollars) The intersection point between total costs and revenue gives the breakeven point for the company. Risk Management Plan The major risks the company faces in the short term is its defaulting on its debt. Company is relying on bank loans to start its operations and if anything goes wrong then it will force the company to shut down its operations. Also competition, government funding, or any accident of a blind person can cause many problems for TDL Ventures. It is therefore important that steps must be taken to manage all these risks. TDL Ventures should be a limited liability company and should take loan on easy terms. Moreover reliance should be on private funding and commercial revenue. Safety measures will be taken in order to avoid any misfortunate event with regards to the clients. Conclusion The Divine Life Ventures is nonprofit organization that aims at providing services to the physically disabled specially to visually impaired people. The purpose of the organization is to free the minds of the blind people and help them become active members of the society. The services offered by The Divine Life Ventures will include a transportation services, a leadership program alongside with personal development and healthy life style programs for the blind people. These programs will help them emancipate from the dependence of the society. The functioning of this organization will be on charity mainly but commercial strategies will also be employed to earn revenues. The goal of the organization is to become a well known name within a few years in the social services industry and open offices in different cities. References Barney, J. (2007). Gaining and sustaining competitive advantage (3rd ed.). New Jersey: Pearson Prentice Hall Froelich, K. (1999). Diversification of Revenue Strategies: Evolving Resource Dependence in Nonprofit Organizations. Nonprofit and Voluntary Sector Quarterly, 28(3): 246-268 Hill & Jones. (2008). Strategic Management. New York: Houghton Mifflin Company Kotler & Andreasen. (2000). Strategic Marketing for non-profit organizations. In Ed. Baker, Michael. Marketing Theory: a student text. London: Cengage Learning EMEA Maher, Stickney, & Weil. (2007). Managerial Accounting: An Introduction to concepts, methods and uses. 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