Green Jobs & Business Development:CREATE Your OpportunitY YouthBuild 2010 National Directors’ Association Meeting Thursday January 21, 2010
Facilitators Ajamu Kitwana Director,YouthBuild Green Business Initiative Kerry Knodle Executive Director, YouthBuild Rockford IL Carlos Martín Consultant, YouthBuild Green Initiative
Overview 1. The Green Economy, YouthBuild USA, & You 2. Creating Your Green Business • Picking a Business Sector • Doing Market Research • Finding the Money • Working Through the Business 3. YouthBuild Support for Your Green Business
The Green Economy Source: Booz Allen for USGBC, July 2009 Source: Center for American Progress, September 2008 Source: Global Insight for US Conference of Mayors, October 2008
Question Which industries, businesses, and jobs do you think of when you hear “the green economy”?
The Green Economy Sectors & Markets Source: CAP, September 2008
The Green Economy Jobs Green Construction Weatherization/Remodeling Deconstruction Energy Auditing Renewable Energy Installation Green Retail Gardening Food Delivery/Preparation Waste Management Land Conservation Source: Global Insight for US Conference of Mayors, October 2008 Source: Good Jobs First, February 2009
The Green Economy Businesses Green Economy Growth Business Competition • Local Services • Innovation • Credibility Green Business Funding • Opportunities: Gov’t & Market • Capital: Gov’t, Foundation, & Private Investors
The Green Economy Opportunities • WAP • PHA & Assisted Housing Retrofits • Local Customer Needs • Building/Remodeling/Deconstruction • Energy Auditing • Small-Scale Renewable Installation • Gardening • Waste Management • Food Delivery/Preparation • Forestry/Land Conservation/Environmental Monitoring • Green Retail • Capital • SBA 7(a), Section 504, and Microloan Loans • ARRA: ARC Loans, Work Opportunity Tax Credit, • Green Venture Capital • Green Venture Credit • Green Business Competitions
Question How many of you have been involved in the YouthBuild USA Green Initiative? How many have your own green programs?
YouthBuild Green Green Initiative Overview • Youth Training • Certifications • Training TA • Leadership TA • Support for Recovery Act Funding: • Greening Public Housing • Weatherization Assistance Program • DOL Green Training Grants • Walmart-YB Green Fellows • Green VISTA Volunteers • Green Business Initiative
YouthBuild Green Business In order to have programs: • Create & Implement Green Business Plans • Expand Programs’ Current Green Businesses • Green Current Programs’ Businesses • Develop Business Protocols & National Network Projects: • Identify Recovery Act Business Opportunities • Pilot Graduate Green Business TA • Develop Affiliate Green Businesses Beyond Training • Walmart Green Business Seed Grants
YouthBuild Green Graduate Busines • Provide direct TA to graduates • Pilot in February to provide 1 graduate with intensive TA business planning • Pilot to be replicated with 4-5 other graduates • Leading to long-term business plan for YouthBuild USA’s involvement • Call for graduates going on now
YouthBuild Green Affiliate Business • National and local market research • TA services • Business Planning (like this workshop) • Business financing • Other ideas and needs?
Walmart Green Business Seed Grants • First-time funding for programs that are: • Full and accredited (WebSTA and URD Submissions, AffNet dues) • Involved in YouthBuild USA’s Green Initiative with 1 year history • Involved in their own green activities with 1 year history • Developed a preliminary business plan for a green for-profit entity • Grant Value: $25,000
Question How many of your programs have or ever had a separate for-profit business?
Programs and Businesses YB Affiliates’ For-Profit Enterprises • - To give students training opportunities • - To offer a needed local service • - To raise additional revenue • - Almost always construction related • -Mixed success rate • Examples: • Fresno YB began a grounds maintenance business in 1993. It reported $2.7M in 2008 revenue, and 30% average gross margins. • The second largest YB program business center began in 2001. It reported $400K+ in 2008 revenue, but -16% average gross margins.
Programs and Businesses • Rockford Business History
Programs and Businesses • Rockford Business Success
Create Your Opportunity …starting with a business plan.
Assignment • Groups of 3-5 • Create a basic business plan in 4 categories • The planned business can apply either to all of the group’s programs or a subset • The business must be green • Fill out the 4 exercise sheets • Present the basic plan • Everyone will give feedback but the panelists will determine the winner
Green Business Planning • Picking a Business Sector • Doing Market Research • Finding the Money • Working It Through
1. Picking a Business Sector Background • Not just revenue possibilities • But program capacities, too • Brainstorming industries, products, & services • Comparing to current services • Brainstorming • Goal-setting: Profit + Social Impact? Measures for both? • Deal-breakers
1. Picking a Business Sector SW = Strengths & Weaknesses Capabilities? USP's (unique selling points)? Resources, Assets, People? Experience, knowledge, data? Innovative aspects? Location and geographical? Price, value, quality? Accreditations, qualifications? Financials? Internal Factors S W
1. Picking a Business Sector EXERCISE • I. Brainstorming • II. Reality Check 1: Profit? • III. Reality Check 2: Experience? • IV. Big Reality Check: SW • V. Goal-Setting
1. Picking a Business Sector Report Back Key Lessons • Mission Tie-in? • Short-Term or Long-Term? • History of Businesses? Resources • SBA: www.sba.gov/smallbusinessplanner • Green for All/SCORE: www.greenforall.org/what-we-do/capital-access-program/introductory-entrepreneurship-workshops • REDF www.redf.org • Local Universities, Business Schools, Professional Associations
2. Doing Market Research Background • Not just about customers • But about competitors, too • Using reliable data about customers and markets • Using data based on actual consumer surveys and demographic information (not just advocacy projections) • Developing market segments, product niches, and service distinction • Hard look at sector realities (local monopolies? saturation?) • Qualifications and credentials needed to compete • Short- and long-term growth potential
2. Doing Market Research OT = Opportunities & Threats Market Opportunity? Political Opportunity Competitors? Startup certifications? Startup costs? Partnerships? Funding? Long-Term Prospects? Business Cycles? O T External Factors
2. Doing Market Research EXERCISE • I. Finding Data • II. Developing Your Own Consumer Survey • III. Identifying the Competition • IV. Big Reality Check: OT • V. Refining the Business
2. Doing Market Research Report Back Key Lessons • Difference between future likelihood and documented history • Beware political programs and long-term markets • Competitors come in all sizes (some with longer track records, some with better promotions) • Do your market research regularly! Resources • Industry-Specific Associations & Governmental Programs • Libraries • Social Enterprise TA Groups
3. Finding the Money Background • Not just the money you need • But the money you have • And the money you can get if you report both accurately: budgets and cash flow • Social enterprise donors, venture capital, venture credit, business loans, government-backed loans • Government grants: innovation or targeted communities
3. Finding the Money Startup Costs Operating Costs • Personnel, Fixed Costs, Variable Costs Revenue Income • Pricing, Margin Investment Income • Program Support (Duration), Other Sustained Investors, One-Time Investors Revenue Return • Program Requirements, Investor Requirements Timing • Cash Flow v Profit, Time to Profit
3. Finding the Money EXERCISE • I. Revenue Projection • II. Budget • III. Funding Sources • IV. Refining Financial Goals
3. Finding the Money Report Back Key Lessons • Do your cost research (get multiple estimates and haggle) • Price your competition and their vendors • Know your limits and your risk-aversion (money and time) • Budget conservatively • Think creatively about investors Resources • Competitors • Related Non-Competing Businesses • Pro Bono Accountants • Social Enterprise Investors • Free Financial Tools: www.dinkytown.net
4. Working Through the Business Background • Organizational Structure • Legal Status • Business Licenses and Permits • Professional Licenses and Credentials • Professional Regulations • Operational Plans • Vendors & Suppliers • Equipment Purchases & Leases • Location, Staffing, and Office Support • Administrative Items • Alliances
4. Working Through the Business Source: Option A for YouthBuild USA, 2009
4. Working Through the Business EXERCISE • I. Structure • II. Operations Plan • III. General & Specific Regulations • IV. Alliances • V. Refining Social Goals
4. Working Through the Business Report Back Key Lessons • Do a sample workflow early on • Know the costs of licenses, permits, and any regulation for your budgets • See what your competitors do • Gauge your program’s comfort level at every level • Understand how to market in your sector • Look for alliances that will help you learn in the short-term for long-term independence Resources • Trade associations • Local city business permitting offices • Board members or staff that have worked in the sector
Wrap Up The Green in Green Business, and the Business in Green Business Green businesses often involve major startup costs. Green businesses need lots of space, especially if they are construction or manufacturing related. Green businesses don’t necessarily have instant demand. By definition, some green businesses might not be able to expand. If you sell your “greenness,” you have to back it up. Both green and business management require special skills. Pilots might help acquire both skill sets. Business is cut-throat; unless you offer something unique, why should anyone buy from you rather than your competitor? You often do not know when things aren’t working well in business; you need to spend time monitoring and reassessing.
Wrap Up Been There, Done That • Kerry’s Final Lessons
Wrap Up Next Steps with YouthBuild USA • Graduate Pilot • Affiliate Business Planning • Affiliate Business Grants • Additional Resources?
Thanks YouthBuild Green Initiative • AjamuKitwana AKitwana@youthbuild.org ● (617) 623-9900 • Kerry Knodle Kerry@youthbuildrockford.org ● (815) 963-6236 • Carlos Martín email@example.com ● (202) 459-3440