ACCESSING FINANCIAL RESORCES
- 1. DRS 255 DISABILITY AND LIVELIHOOD TOPIC THREE ACCESSING FINANCIAL RESOURCES, DEVELOPING SIMPLE BUSINESS PLANS, MICRO CREDIT AND FUNDING AGENCIES AND GOVERNMENT SUBSIDIES ENTREPRENEURSHIP A Brief History of the Term Entrepreneur The word 'entrepreneur' derives from French, literally meaning someone who 'takes between'or 'goes between'. The earliest use of the term reflected this sense of the 'middleman' whodirected resources provided by others. In the Middle Ages, an entrepreneur was someone whomanaged large projects on behalf of a landowner or the church, such as the building of acastle or a cathedral. In the 17th century, the concept was extended to include some elementof risk and profit. Entrepreneurs were those who contracted with the state to perform certainduties, such as the collection of revenues or the operation of banking and trading services. Asthe price was fixed, the entrepreneur could profit - or lose - from their performance of thecontract. Richard Cantillon introduced the word into economic literature in 1734 when hedescribed three types of agents in the economy: the 'landowner' who as the proprietor of landprovided the primary resource, 'entrepreneurs', including farmers and merchants, whoorganized resources and accepted risk by buying 'at a certain price and selling at an uncertainprice', and 'hirelings' who rented their services. J. B. Say, a French economist writing in theearly 1800s, distinguished between the profits of those who provided capital and the profitsof entrepreneurs who used it. He defined an entrepreneur as 'someone who consciouslymoves economic resources from an area of lower and into an area of higher productivity andgreater yield'. In other words, the entrepreneur takes existing resources, such as people,materials, buildings, and money, and redeploys them in such a way as to make them moreproductive and give them greater value. This definition implies changing what already exists;it sees the entrepreneur as an instrument of change, someone who does not seek to perfect oroptimize existing ways of doing things, but searches instead for new methods, and newmarkets - different ways of doing things. In the mid-twentieth century, Joseph Schumpetertook up this theme of the entrepreneur as a necessary destabilizing force. According toSchumpeter, economic equilibrium, which optimizes what already exists, does not createhealthy economies. A dynamic economy takes as its norm the disequilibria brought about bythe constant change of innovation and entrepreneurship. In the 1980s, Peter Drucker developed these earlier ideas, seeing the emergence of anentrepreneurial economy in the USA as a 'most significant and hopeful event'. He defined anentrepreneur as someone who 'always searches for change, responds to it, and exploits it as 1
- 2. anopportunity'. He thus made innovation a necessary part of entrepreneurship. In doing so, hefocused on the management processes involved in what an entrepreneur does. David McClelland also said Entrepreneurs are persons who have a high need for achievement. McClelland’s basicpremise is that individuals with a high need to achieve will exhibitentrepreneurial behaviour. The following are some of the motivating factors of entrepreneurs. a) Displacement leading to a need to survive b) An innate or acquired need to achieve goals of a monetary, social or political nature c) Curiosity and a need to exercise an innovative mind d) The possession of the relevant entrepreneurial traits and technical and managementskills e) Need for higher returns on time and money invested f) Restlessness due to frustration of one kind or another g) Need for independence and self-determination h) Need for financial, social or political security Furthermore, Entrepreneurs create products, services and jobs. They expand economies, improve people's lives, provide employment (high and rising wages) and bring about competition. A competitive environment, in turn, gives rise to efficiency, meritocracy and further innovations and entrepreneurial drive.The potent combination of entrepreneurship and technological innovation can forge an environment that is conducive to further enterprise, involving even government policy in supporting entrepreneurship and innovation. ENTREPRENEURSHIP COMPETENCIES Management Competency Management competencies relate to managing key functions of the enterprise. Researchindicates that problems in young firms are most likely to arise in the areas of marketing,finance and the management of people. The competency to deal with these areas dependsparticularly on the entrepreneur in the early years of their venture when they are less likely toemploy specialists. The model entrepreneur has all-round competency in these keymanagement functions. Leadership A leader is one who influences and inspires others to attain goals. Outstanding leaders have avision. A vision is a mental image of a possible and desirable future state of the enterprise.Itis an ideal future that goes beyond the ordinary and perhaps what other thought possible. Thevision provides a direction in which the leader wants the enterprise to move. Arthur Jagoprovides the following definition: Leadership is both a process and a property.The process of leadership is the use of non-coercive influence to direct and coordinate theactivities of the members of an organized group toward the accomplishment of groupobjectives. As a property, leadership is the set of qualities or characteristics attributed to thosewho are perceived to successfully employ such influence.Outstanding leaders have a vision. A vision is a mental 2
- 3. image of a possible and desirablefuture state of the organization. It is an ideal future that goes beyond the ordinary and perhapsbeyond what others thought possible. The vision provides the directions in which the leaderwants the organization to move. Managers at all levels can formulate visions for their organizations or units. Their visionsshould be ethical and based on a realistic assessment of resources and stakeholders needs. Inadditions, leaders need to study abreast of environmental changes. Although effective leaderspreserve in the face of obstacles, they need to recognize when new circumstances dictate theneed for a new vision. Marketing Competency Marketing can be defined as a small business function and a set of processes for creating,communicating and delivering value to customers and for managing customer relationships inways that benefit the small business owner. It can also be defined as a way of choosing targetmarkets and getting, keeping and growing customers through creating, delivering andcommunicating superior customer value than competitors. The essence of any marketingeffort is satisfying customers better than competitors. From the above definitions, the following are the key points; 1) Marketing is A business function This suggests that marketing is a deliberate activity within an enterprise. Enterprises areexpected to carry out marketing campaigns in order to be able to get customers. They cannotassume customers will automatically know what they are offering and will buy without anypersuasion. Marketing is not a single activity but a process. It is the process for creating, communicatingand delivering customer value. The small business owner creates a product or service,ensures that consumers are aware of it mainly through promotion activities and takes theproduct or service where the customers are. It is also a process of managing customerrelationships. This is concerned with ensuring that customers are happy about your productsor services because you provide superior value than your competitors. The customer gives outhis/her money for something that is of value to him/her. 2) Marketing is concerned with getting, keeping, and growing customers Marketing involves attracting, retaining and increasing customers. Without attracting,retaining and cross selling the enterprise success is doubtful. A small business owner shoulddevise ways of attracting, retaining and increasing their customers. To attract and retain thecustomers an enterprise can use a host of strategies like offering discounts, providing superiorproducts and good customer care. 3) Marketing involves identifying, anticipating and satisfying customers’ needs An enterprises’ major role is to identify customer needs and satisfy them more thancompetitors. Therefore marketingresearch is at the heart of any marketing activity. 3
- 4. Enterprises should also anticipate customer needs and satisfy them. They should not onlysatisfy customers current needs but should be innovative by developing offers that will makecustomers life more enriching. According to Prof Stephen Brown of Ulster University if anenterprise pays too much attention to what customers say are their needs and wants, anenterprise will simply make products similar to those that already exist. Consumers start fromwhat they know, not from what might be possible. It is the entrepreneurs’ job to go beyondwhat customers say they want. This calls for innovation. 4) Marketing involves choosing customers Marketing is concerned with choosing the consumers to serve. In most cases an enterprisecannot be able to serve all the consumers. It must choose those that can be served effectivelyand efficiently. The choice of customer is at the heart of marketing. It determines all the othermarketing decisions like what to produce, the price to charge, how to promote and distributeand a host of similar decisions. 5) Marketing involves satisfying customers at a profit Marketing activities are geared toward maximizing profits. The role of a small businessowner is to satisfy customer’s needs and at the same time make profits. The role is not just tomake the customers life pleasurable but also to make money for the enterprise.What is marketed? According to Kotler and Keller (2006) marketers are involved in marketing 10 types ofentities: goods, services, experiences, events, persons, places, properties, organizations,information and ideas. (i) Goods These are physical commodities that may be produced and marketed by an enterprise. Theyconstitute the bulk of most countries production and marketing effort. (ii) Services They are intangible, inseparable and perishable. They cannot be seen or heard beforeconsumption. They cannot be separated from the supplier and also if the consumer is notavailable at the point of delivery that would represent lost earnings. Examples of servicesinclude the clinics, hotels and restaurants, hair salons, barber shops, schools, banks, lawfirms, car rentals, cleaning services and many others. (iii) Events Marketers also promote time based events such trade fairs, artistic performances andanniversaries. Global sporting events such as world cup, Olympics and commonwealth gamesare promoted aggressively to companies and fans. These events have led to emergence 4
- 5. ofevent management professional that work out details of an event and ensure that it is doneeffectively and efficiently. (iv) Experiences By arranging several services and goods, a firm can create stage and market experiences. Forexample a hotel can provide live music band concerts as customers enjoy their meals. Somecompanies also market experiences such as climbing Mount Afadjato or visiting Kakum National Park. (iv) Persons Marketing of persons has become a major business. Major film stars, athletes, soccer stars,artists, musicians and others have agents and managers who market them to organizations.They are used in endorsing products and services. Others market themselves directly such asthe politicians. (v) Places Countries, regions and cities compete actively to attract tourists, investors, companyheadquarters and new residents. Some places are known for certain things or events. Forexample, the Vatican is a spiritual city; Mombasa is associated with leisure, while WaltDisneyland is associated with cartoon. (vi) Properties They are intangible rights of ownership of either real property (such as land or building) orfinancial property (stocks and bonds). Properties are bought and sold and this requiresmarketing. Real estate agents market houses on behalf of their owners. Commercial banksand investment companies sell financial securities to organizations and individuals. (vii) Organizations Organizations actively work to build a strong, favorable and unique image in the minds oftheir publics. They spend money on corporate identity advertisements. Universities,museums, performing arts organizations, churches and non-profits organizations all usemarketing to boost their public images and to compete for audiences and funds. (viii) Information Information can be produced and marketed as a product. This is what universities and schoolsproduce and distribute at a price to parents and students. Non-fiction books marketinformation. 5
- 6. (ix) Ideas Every market offering includes a basic idea. Products and services are platform for deliveringsome idea or benefit. Social marketers are promoting such ideas as ―friends don’t let friendsdrive drunk‖ and ―A mind is terrible thing to waste‖. Finance Management Competency Financing is responsible for obtaining and using funds in a way that will maximize the valueof the enterprise. Proper financing will enable any firm to provide better products/services toits customer at lower prices, pay higher wages and salaries to its workers and also providegreater returns to the investors. Sound financing contributes both to individuals of any giveneconomy as a whole. Financing includes the following duties: a) Budgeting b) Raising funds in the capital market c) Evaluating investment projects d) Planning the firm’s marketing strategies HOW TO WRITE A BUSINESS PLAN INTRODUCTION Are you thinking about starting a business? Have you got a Plan? That’s Plan with capital ―P‖ for Business Plan. If you haven’t written your plan yet, your business is still in the fantasy stages. A company’s business plan is what lenders such as banks and other sources of funding use in deciding to lend you money. It’s the main company document that your employees -- and you -- use to gauge your company’s success and to make decisions about what you should do first, second, or not at all. If you are starting a home-based business on a shoestring, some of these suggestions probably may not be necessary, but you still should create a plan that outlines your goals, expected costs, marketing plan and exit strategy. A business plan is your road map for how you expect to succeed and how you will measure your success. WHAT IS A BUSINESS PLAN? A Business Plan can be defined as a document that provides a synthetic (Unreal, Artificial, Mock) view of the contents and characteristics of a new entrepreneurial project, or the perspectives to develop an existing one. It is an expression of why your Business is going to be a success. 6
- 7. Fundamental or Key Success Factors of a Business 1. It must have a clear business concept 2. Appropriate strategy 3. Workable document as a guide 4. Thorough market research 5. Availability of Raw materials 6. Conducive business Environment 7. Competent Human Resources 8. Good leadership 9. Financial Sustainability 10. Clear Vision 11. Understanding the culture of your market place 12. Networking Environmental Scan (PEST Analysis) a) Political – Backing from Government or its institutions b) Economic – Funding sources, is the Env’t difficult to trade in? etc c) Social – Multi cultural, d) Technological – What technology or innovation are you introducing? Here is a quick nine-step guide to what you will need in your company’s business plan: 1. An executive summary outlining goals and objectives. The executive summary introduces your business strategy and probably is the most important section for lending institutions. If you can’t persuade a loan officer in the first two or three pages that you’ve got a viable business proposal, you’re going to leave empty handed. This summary is also important as a communication tool for employees and potential customers who need to understand -- and get behind -- your ideas. 2. A brief account of how the company began. Clearly explain the origins behind the company’s creation and how you or your business associate came up with the idea to start your business. 3. Your company’s goals. Explain in a few paragraphs your short and your long term-goals for your company. How fast do you think it will grow? Who will be your primary customers? 4. Biographies of management team. The management section should include the names and backgrounds of lead members of the management team and their respective responsibilities. 5. The service or product you plan to offer. A key aspect of this section will be a discussion of how your product or service differs from everything else on the market. 7
- 8. 6. The market potential for your service or product. Remember that you’ve got to convince lenders, employees and others that the market you’re after is relatively large and growing. You’ll need to do some research for this section. If it’s a locally based business, you need to assess the demand for your offering within xx-mile radius, based on what you determine is a reasonable distance from your business. If it’s a Web-based business or a business that relies on both the Internet and local traffic for revenues, you’ll need to evaluate demand on a local and/or a national basis. A research report from sites such as Forrester Research can cost hundreds to thousands of dollars. But you may be able to get some basic information simply by using the Web and its many engines and directories. 7. A marketing strategy. How do you plan to tell the world you’re open for business? Will you rely exclusively on word of mouth (not a good plan unless you’ve already got a reputation)? Will you advertise in print, television or on the Web (or on all three)? Will you use online marketing tools to get your company listed on search engines and advertised on other web sites? You’ll also need to include how you plan to spend on marketing. 8. A three- to five-year financial projection. This section should include a summary of your financial forecasts, with spreadsheets showing the formula you used to reach your projections. You’ll need balance sheets, income statements and cash flow projections for the entire forecast period. The summary in this section is also where you would tell prospective lenders how much money you’d like to borrow to cover your startup costs. The assumption that you make in this section will make or break your company’s success. If you’re unsure about using this kind of financial modeling, find a professional. It’s worth the money. 9. An exit strategy. All good business plans include a section that lays out the benchmarks you’ll use in deciding to call it quits. The strategy could be based on a dollar figure, revenue growth, the market’s reception to your idea, or a consensus among top officers. IDENTIFYING BUSINESS OPPORTUNITIES I will like to use the example given by a renowned scholar, C.K. Prahalad, a Harvey C. Fruehauf Professor ofCorporate Strategy and International Business,The University of Michigan Business School, who wrote a book titled ―The Fortune at the Bottom of the Pyramid‖. His perspective was that if we stop thinking of the pooras victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up. Four billion poor can be the engine of the next round of global trade and prosperity. It can be a source of innovations. 8
- 9. THE MARKET AT THE BOTTOM OF TE PYRAMID According to Prahalad, the distribution of wealth and the capacity to generate incomes in the world can be captured in the form of an economic pyramid. At the top of the pyramid are the wealthy, with numerous opportunities for generating high levels of income. More than 4 billion people live at the BOP on less than $2 per day. This is where the market is. To enter into such a market therefore one will need innovation and technology. THE MARKET AT THE BOP There is significant untapped opportunity for value creation (for BOP consumers, shareholders, and employees) that is latent in the BOP market. These markets have remained ―invisible‖ for too long. That is why we as young Entrepreneurs must take advantage of this market down there and create opportunities for ourselves. We must understand what the poor need and create value for them by so doing we will be on the path of creating profitable ventures. 9
- 10. ACCESSING FINANCIAL RESOURCES Finance is the money available at the right price,at the right time, obtained at the lowest costto spend on business needs. Right from the moment someone thinks of a business idea, there needs to be cash. As the business grows, there are inevitably greater calls for more money to finance expansion and also take care of the day to day running of the business. The main reasons a business needs finance are to: 1. Start a business 2. Finance expansions to production capacity 3. Develop and market new products 4. Enter new markets 5. Take-over or acquisition 6. Moving to new premises 7. Pay for the day to day running of business A business needs to assess the different types offinance based on the following criteria: 1. Amount of money required 2. How quickly the money is needed 3. The cheapest option available 4. The amount of risk involved in the reason for the cash 5. The length of time of the requirement for the finance Short Term and Long Term Finance Short term finance is needed to cover the day to day running ofthe business. It will be paid back in a short period of time, soless risky for lenders. Long-term finance tends to be spent on large projects that willpay back over a longer period of time. More risky so lenderstend to ask for some form of insurance or security if thecompany is unable to repay the loan. A mortgage is anexample of secured long-term finance. The main types of short-term finance are: Overdraft Suppliers credit Working capital The main types of long-term finance that is available to a business are: Mortgages Bank loans Share issue Debentures Retained profits Hire purchase 10
- 11. Equity Finance Equity finance is the money provided by the owners of the business. Sole traders and Partnerships: A sole trader will provide money from his or her own savings. A sole trader may find it difficult to raise much money from this sourceand, therefore, may take on a partner who brings money into thebusiness. FUNDING AGENCIES IN GHANA These are made up of the following: BANKS: Examples are: ADB, GCB, NIB ete. FINANCIAL SERVICES COMPANIES: Examples are: Bayport Financial Services, NDK Financial Services, Bond Financial Services, etc. SAVINGS & LOANS COMPANIES: Examples are: Procredit, Unicredit, Express, First Allied, First Capital Plus, etc MICRO FINANCE INSTITUTIONS: Examples are: Excess Development Ltd, Blue Financial, etc. EQUITY & VENTURE CAPITAL COMPANIES: Examples are: Data Bank Group, HFC Bank, Ghana Venture Capital Trust Fund, Bedrock, Venture Capital Finance Company, Oasis Capital AGENCIES THAT ASSIST ENTREPRENEURS The African Network Of Entrepreneurs (TANOE) This is a limited by guarantee organization that seeks among other things to assist African entrepreneurs to build sustainable businesses. TANOE serves as a hub of hope for entrepreneurs who desire to live their dreams and are passionate about gaining the requisite knowledge to better position them to move ahead of their competitors and fulfill their ambition of building a sustainable business. We are dedicated to helping entrepreneurs succeed. Our initiatives and programs are focused on building a strong entrepreneurial environment enabling entrepreneurs to access needed resources and relevant information to polish their ideas, build their businesses and accelerate their business growth. SevenFund.com SEVEN (Social Equity Venture Fund) is a virtual non-profit entity run by entrepreneurs whose strategy is to markedly increase the rate of innovation and diffusion of enterprise-based solutions 11
- 12. to poverty. It does this by targeted investment that fosters thought leadership through books, films and websites; supporting role models - whether they are entrepreneurs or innovative firms - in developing nations; and shaping a new discourse in government, the press and the academy around private sector innovation, prosperity and progressive human values. SEVEN is a leader in the field of Enterprise Solutions to Poverty. We ask the question, ―How do we support those who are self-determined, action-oriented, and effective?‖ We find and invest in the innovations of pioneering thought leaders and entrepreneurs inside the world’s poorest nations; we support contrarian research, films, books and competitions that spotlight new role models and diffuse their best ideas. Ghana Start Up Capital Fund GSC Fund Brief: The Ghana Start-Up capital fund is a private sector (non-profit) and a self- help initiative set-up in 2011 to massively promote entrepreneurship, provide needed support and resources to entrepreneurs, create jobs and reduce unemployment, provide skills development and knowledge transfer. Vision of Fund: To raise, in a decade, GH¢10,000,000 (Ten Million Ghana Cedis) through donations and contributions by entrepreneurs, individuals, organizations, local and international donors, investments and fund-raising activities to support the development of entrepreneurship and to invest in innovative and economically viable ideas and start-up businesses. Objectives of the Fund: The GSC Fund seeks to meet the following objectives: I. To create an enabling environment for the massive growth of entrepreneurs and the actualization of innovative ideas and sustainability of start-up businesses through the provision of needed resources and support. II. To build the skills and capacity of the youth in Ghana III. To contribute to Nation Building and Economic Development IV. To help eradicate extreme poverty and hunger by reducing unemployment especially among the youth in Ghana (MDG 1) V. Support and empower women to build global entrepreneurial businesses thereby promoting gender equality (MDG 3) 12
- 13. VI. To develop global partnerships to ensure the sustainably of the Fund and the continuous fulfillment of the fund’s vision, objectives and functions (MDG 5) VII. In influence, challenge and advocate for favorable policies to ensure the sustainability and global competitiveness of Ghanaian entrepreneurs. STARTING AN NGO IN GHANA This covers five main steps essential to setting up an NGO in Ghana. The first two are generic steps foranywhere in the world. The final three steps are for Ghana, specifically. Feel free to share this document with anyonewho may be starting their own NGO anywhere. 1. Develop Your Vision and Mission 2. Develop Goals and Objectives 3. Set up a Board of Directors 4. Draft a Constitution 5. Register the Organization in Ghana 1. Develop Your Vision and Mission You need a compelling vision and genuine commitment to that vision for the long-term. If you do things right you will goMaD (making a difference) in a way that fully benefits your target communities.Vision and Mission will explain your organization’s existence and focus its activities. And, this will ―sell‖ your NGO to theworld.Writing a vision and mission is like crafting an elevator pitch: make it short, clear and a little intriguing. The difference between a Vision and a Mission Vision Your NGO’s vision is what the community would be if the problem is solved. A vision is the "ideal situation" that you hopeto achieve.At the most basic level, your vision could be ―World Peace‖.Your mission would be to ―eradicate conflict by…‖ and listing ways to do this. An eg of a vision is ―Economic independence and environmental regeneration for impoverished communities in Ghana.‖Establishing a meaningful vision requires consultation and time. You must identify a problem that requires a solution.Sometimes this is very complex and technical and sometimes it is simple.The best way to determine the vision, and thus problem to be solved, is to spend time with your target group/s to learntheir needs, aspirations and future goals. The ability to be flexible and to listen is important. It’s important to get it rightnow, before you start down the wrong path. You might want to bring technology to help a community travel faster between two villages, but the community mightreally want and need a health clinic. Just because you have something to offer, does not mean that it is helpful to thecommunity. You must learn to adapt your offer to the needs.You should research organizations similar to the one you are starting to ensure you are not be duplicating the work ofother groups. It is more beneficial to address a neglected need, than a 13
- 14. need that is already catered for, unless the othergroups are not doing a good job. In that case, you can attempt to do better.Your ideal community after the problem is solved is, therefore, the basis of your NGO’s vision.Why don’t you try thinking about the problem in the community that you could solve and how it would look when it’s solved? Then try writing that vision in less than 30 words. Mission If your vision is ―to help impoverished communities in Ghana become economically independent and environmentallysustainable,‖ then addressing this vision becomes the mission of your NGO. In other words, the mission is the ―how‖ of your NGO. How you will get it done—in a few short sentences. The mission consists of specific goals. For example, a Foundation’s mission statement is:―To help impoverished communities develop sustainable sources of income and establish practices that will regenerate thelocal environment for current and future generations‖.We also express this in a ―tag line‖: Income generation, re- generation, and next generation.Income generation refers to the projects we are developing to create sources of income, re-generation refers to theenvironmental work we are doing to ―re- generate‖ the environment in the communities where we are working on incomegeneration, and next generation refers to the future and the legacy we aim to leave.Your NGO’s mission statement will serve as a guide for the direction of your organization. It will also clearly explain yourfocus to donors and the general community. Basically, it’s the steering wheel of your organization. You wouldn’t drive aCar without a steering wheel certainly and you will probably not drive an NGO without a vision and mission.The statement should be concise and incorporate the core values and philosophy of your NGO.What is your NGO’s vision and mission? Can you express them in less than 30 seconds and less than 30 words? If not, tryrethinking and re-crafting them on paper. 2. Establish Goals and Objectives Establishing the goals and objectives of the non-profit or NGO is the next thing to do after determining the vision andmission. This is the same for any organization, small or large, and is fundamental to organizational development.Let’s talk about the difference between goals and objectives. Goals are the big hitting changes you aim to make happen.Your goals might be stated in your vision statement.You know: World peace, eradicating extreme poverty, providing a community drop-in house, establishing a fair trade shop,or setting up a soup kitchen. Objectives are actions that lead you towards achieving your goals, one by one.Projectsmart.co.uk says this: ―Poorly defined goals and objectives, or goals without objectives, pushes a project intooverruns, territory battles, personality clashes, missed milestones, and unhappy clients. Goals and objectives must beclear statements of purpose that drives the end result of the project.‖What this says is that things will get messy without goals and objectives. So, let’s get to it.Goals are the ―What‖: What you’re aiming for.If playing football it would be: ―Score 3 goals.‖Objectives are the ―How‖ you’ll get there: ―Kick the ball between the goal posts.‖There’s no point 14
- 15. attempting to reach your goal if you don’t actually do anything to get there. If you don’t kick that ballyou are not going to score one goal.It’s smart to start your objectives with action verbs. They are ―actions‖ after all. Instead of: ―the ball kicked between the posts‖ Write: ―kick the ball between the posts.‖ The second sentence is stronger.Instead of: ―The delivery of 20 mosquito nets to Mampong‖ write ―deliver 20 mosquito nets to Mampong.‖This is really a language issue and the aim is to keep it simple and strong. Start with action.On the subject of ―smart‖, if you’re familiar withorganizational development you would know that objectives should beSMART: Specific Measurable Achievable Realistic Timebound Let’s say your goal is to establish a fair trade shop selling products from Africa, starting with coffee, and then one of yourmain objectives would look like this:Identify 20 cooperatives producing fair trade coffee in East Africa by September 2010―Identify‖ is a nice, strong action verb to begin with.But is this a SMART objective?Let’s see. Specific? Yes. In other words, the opposite of vague. We identify the number of cooperatives, the location and the date.We will know if we do not meet this objective. Measurable? Yes. ―20‖ and ―September 2010‖ are very measurable objectives and we will know absolutely whether wemeet these or not. There is no scope for ambiguity. Achievable? This is more subjective, but if it’s April now, this is certainly achievable. (This work is not for the lazy.) 20might be pushing it, though. We might have to revise this objective. Realistic? A goal might be achievable, but you need to ask if you have the resources—technical, financial, human—torealistically do it? If your objective is to identify 20 cooperatives and you have no access to the internet, a telephone or afax, then it’s probably not realistic. If you do, however, then it is a realistic objective. When you’re writing an objective, be honest with yourself about your limitations and abilities. If you need help, seek it. Time bound? Yes. This means you put a date on it. Our objective is beautifully time bound and we will certainly know if,when September rolls around, we have not met it. So, you have goals and your SMART objectives. Your goals will be few and your objectives will be many—and SMART!Try applying the SMART formula to your own organizations objectives and see if there are ways you can refine them to beSMART.Doing good takes more than good intentions; it takes a lot of bad-ass planning too.We could also put it like this:―Goals are the things your NGO will do in the medium to long term to achieve its mission, while the objectives are theimmediate and ongoing actions you will take to achieve your goals.‖ So, let’s look at this again.Goals: The ―What‖ you plan to achieve 15
- 16. Objectives: The ―How‖ you plan to achieve it. Be SMART.These first two steps are useful for starting an NGO or non-profit anywhere, not just Ghana or Africa. The next steps will relate specifically to Ghana. 3. Set up a Board of Directors Now that you have outlined your vision and mission, and hopefully set some realistic goals with SMART objectives, the nextstep in starting an NGO in Ghana is to set up a Board of Directors. The Board of Directors serves as the governing body of your NGO. You can instate a maximum of five individuals. Ideally,they will share your vision and mission. These individuals should be experienced and have skills to supplement your own sothat the NGO can achieve its vision and mission.The size and structure of the Board of Directors and its composition may change depending on the needs and priorities ofyour NGO as time passes. Your Board of Directors is expected to perform the following functions: · Hire and supervise the Executive Director of your NGO · Develop and approve budgets · Develop policy · Champion the cause of your NGO · Represent your NGO to the larger community · Mobilize funds for your NGO They can perform any other function that you deem fit for them. 4. Draft a constitution After setting up your board of directors, to establish an NGO in Ghana you must create a constitution. The constitution is aset of self-imposed governing principles by the NGO and therefore, must be consistent with the specific needs of your NGO. The constitution stipulates specifically how your NGO will be run. It determines the structure, roles and responsibilities ofthose involved, and organization of your NGO. It also guides your organization’s operations and activities. It should beclearly written, deliberately structured and be up-to-date to meet the needs of your NGO.The constitution will guide the behavior of all staff and members of your NGO, including the behavior and actions of theBoard of Directors and the Executive Board. Each member of your organization must have a copy of the constitution ofyour NGO for reference purposes.Constitutions vary according to the specific needs of NGOs, however the following list is a guide of commonly includedelements · Official name of your NGO · The vision/mission and goals/objectives · Registered office · The programme areas · Members and qualifications and length of memberships · Board size, responsibilities, structure · Structure of board meetings 16
- 17. · Committee Structure · Executive positions and functions and procedure for dismissal · How your NGO is funded · How funds are applied · Amendment procedure for the amendment of the constitution You can appoint a constitutional committee to draft the constitution and submit it to the board of directors and executiveboard for approval. Once approval is given, the constitution becomes the over-arching standard by which your NGOoperates and regulates its activities, behavior and actions of all its members, including the board of directors and theexecutive board.It is important for the constitutional committee to do close consultation with the board of directors, the executive boardand the broad-base membership of your NGO to reduce the risk of disapproval of the drafted constitution.It is wise to include a review of your constitution in your annual planning process so that you can adapt your activities to the needs of your NGO. 5. Register your NGO in Ghana The important first four steps have been taken to profile the NGO. 1. Develop vision and mission 2. Set goals and objectives 3. Set up a Board of Directors 4. Set up a Constitution Register the NGO in Ghana. NGO registration laws differ from country to country. Since we’re looking at Ghana, let’s now take a look at the legalrequirements and the registration steps for NGOs in Ghana.It’s a two-step application process. The first step involves applying to the Registrar General’s Department. The secondstep involves applying to the Department of Social Welfare. 1. Applying to the Registrar General’s Department Certificate to Commence Business and Certificate of Incorporation The first step in the NGO registration process is to obtain a Certificate to Commence Business and Certificate ofIncorporation.Purchase the NGO registration form at the Registrar General’s Department in Accra or at the regional post offices outsideof Accra. The current cost of the form is nine Ghana Cedis, fifty Pesewas (9.50). Please note here that there are differentregistration forms for registering different organization types. NGOs must pick the form marked ―The Companies Code,1963 (Act 179), Regulations of a Private Company Limited by guarantee.‖ Fill the form Next, fill in the required information in the appropriate spaces on the form. Be sure to take enough time to do thiscorrectly. Most importantly, it must be typed on a type-writer, not a computer. The trick is to make photocopies of theform and fill it out with ink, and then submit 17
- 18. that photocopied, handwritten form with the original form to a typingprofessional to type the details in the required spaces with a typewriter on the original, using the copy as a reference. Typewriting services are available for a small fee at post offices. If you’re lucky enough to have a typewriter lying around,go for it (and set up a small side business for NGO registration applicants). Some of the information that the registration form requires include: a. The name of NGO b. The objectives c. The first members of the Executive Council or Executive Board. The number must not be less than two persons andnot more than twenty persons d. Particulars of Directors and Secretary, which include their names; nationalities; usual residential addresses;business occupation e. Name and address of Auditor. If you don’t have an Auditor, don’t worry because the Registrar will provide you withone upon approval of your application f. Address and P.O.Box of registered office; principal place of business If in doubt or confused, contact the Registrar General’s Department or the National Board for Small Scale Industries at theregional levels for assistance. After filling the form, submit it to the Registrar General’s Department together with the registration fees. The currentamount is 250 Ghana Cedis. They will issue the certificate to commence business in about two weeks. It takes aboutanother week to get the certificate of incorporation. 2. Applying to the Department of Social Welfare NGO Status Application After securing the certificate of incorporation from the Registrar General’s Department to operate as a company, it’s timeto apply for NGO status from the Department of Social Welfare. The Social Welfare Department is the regulator of NGOs in Ghana and is therefore mandated to issue certificates ofrecognition to organizations to operate as NGOs. The requirements for registering an organization with the Social Welfare Department for NGO status have to be submittedto the national office of the Department in Accra and the approved fees paid in full. · Certificates of Incorporation and to Commence Business from the Registrar General’s Department · Application letter on organization’s official letter head addressed to The Director Department of Social Welfare P.O.Box M. 230 Accra, Ghana · Organization’s constitution · NGO profile form 18
- 19. · Social investigation report Both the NGO profile form and social investigation report will be provided by the Social Welfare Agency near yourorganization’s location · A recommendation letter from the District, Municipal or Metropolitan Assembly in which your organization is located · Any brochure or publication of your organization. This could be your organization’s profile, which talks about yourvision, mission, goals and objectives, your programme areas, your board of directors, your staff and any otheruseful information about your organization. Three copies of an endorsement letter from regional office of Departmental of Social Welfare. The Department ofSocial Welfare has offices in all the regions of Ghana. It takes about one month to get the NGO status certificate. Now, you’re registered! HOW TO WRITE A PROPOSAL FOR FUNDING A PROJECT The Style of a Proposal The basic writing style of a proposal is the same for any type of technical writing. For proposals to be effective try to follow these tips: State the purpose clearly at the beginning of the proposal. State the background information the reader/funder/investor will need to understand your proposal. Use a language that everyone can understand. Use short sentences that are clear and to the point. Make sure that your ideas are not hidden between unnecessary words. Make sure that the reader has all the important information needed for the final decision. Proposals will either be accepted or rejected. Obviously, you want your proposal to be accepted. To help make this possible, follow the six steps listed below. 1. Your proposal should define the problem and state how you plan to solve the problem. Your proposal should assure your readers/funders that you can solve the problem effectively. Everything in the proposal should revolve around the problem and an effective way to solve it. 2. Do not assume that your readers/funders will believe your solution is the best. The purpose of your proposal is to convince your readers/funders that your solution is the best. You should not be over confident that they will approve of your solution. Do your best to look at the proposal and solution from the reader's point of view. 3. Your proposal should be researched thoroughly. If possible, you should provide readers with examples and facts. These items usually make your proposal more meaningful and convincing. Try to keep your opinions out of the proposal. Opinions are not facts, and 19
- 20. most readers will not support them. The best advice is to research other articles and proposals on your topic. You can always include this information in your own proposal. 4. Your proposal should prove that your solution works. Make sure that your solution is possible. You should include an analysis of your plan and possible results of your solution. Try a pre-test of your solution to see if it works. You may need to revise your solution before submitting your proposal. 5. Your proposal should be financially feasible. Think about the finances of the company or person to whom you are writing the proposal. Make sure that they can afford the solution you are proposing. Make sure to explain why your solution would be worth their time and money. 6. Your finished proposal should look attractive. The finished proposal should be as perfect as you can get it. This includes the overall appearance of the proposal and the content inside the proposal. 20