SEARCH Toolbox

This toolbox will guide Hampshire community entrepreneurs to build their own toolbox that will assist in the creation of their enterprise.

= Leadership =

Tools and Strategies

 * Opportunity Identification
 * Values
 * Intended Outcomes
 * Knowing Your Limits
 * Scruff of your neck example
 * Introverted/Extraverted

SWOT
SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a projector in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieving that objective. The technique is credited to Albert Humphrey, who led a research project atStanford University in the 1960s and 1970s using data from Fortune 500 companies.

Strategic Use: Orienting SWOTs to An Objective
If a SWOT analysis does not start with defining a desired end state or objective, it runs the risk of being useless. A SWOT analysis may be incorporated into the strategic planning model. An example of a strategic planning technique that incorporates an objective-driven SWOT analysis is SCAN analysis. Strategic Planning, including SWOT and SCAN analysis, has been the subject of much research.


 * Strengths: attributes of the organization that are helpful to achieving the objective.
 * Weaknesses: attributes of the organization that are harmful to achieving the objective.
 * Opportunities: external conditions that are helpful to achieving the objective.
 * Threats: external conditions which could do damage to the business's performance.

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs.

First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated.

Creative Use of SWOTs: Generating Strategies
If, on the other hand, the objective seems attainable, the SWOTs are used as inputs to the creative generation of possible strategies, by asking and answering each of the following four questions, many times:


 * How can we Use each Strength?
 * How can we Improve each Weakness?
 * How can we Exploit each Opportunity?
 * How can we Mitigate each Threat?

Ideally a cross-functional team or a task force that represents a broad range of perspectives should carry out the SWOT analysis. For example, a SWOT team may include an accountant, a salesperson, an executive manager, an engineer, and an ombudsman.

Matching and converting
Another way of utilizing SWOT is matching and converting.

Matching is used to find competitive advantages by matching the strengths to opportunities.

Converting is to apply conversion strategies to convert threats or weaknesses into strengths or opportunities. [ 1]

An example of conversion strategy is to find new markets.

If the threats or weaknesses cannot be converted a company should try to minimize or avoid them.[ 2]

Evidence on the Use of SWOT
SWOT analysis may limit the strategies considered in the evaluation. "In addition, people who use SWOT might conclude that they have done an adequate job of planning and ignore such sensible things as defining the firm's objectives or calculating ROI for alternate strategies." [ 3] Findings from Menon et al. (1999) [ 4] and Hill and Westbrook (1997) [ 5] have shown that SWOT may harm performance. As an alternative to SWOT, J. Scott Armstrong describes a 5-step approach alternative that leads to better corporate performance.[ 6]

These criticisms are addressed to an old version of SWOT analysis that precedes the SWOT analysis described above under the heading "Strategic and Creative Use of SWOT Analysis." This old version did not require that SWOTs be derived from an agreed upon objective. Examples of SWOT analyses that do not state an objective are provided below under "Human Resources" and "Marketing."

Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company's unique value chain. SWOT analysis groups key pieces of information into two main categories:


 * Internal factors – The strengths and weaknesses internal to the organization. - Use a PRIMO-F analysis to help identify factors
 * External factors – The opportunities and threats presented by the external environment to the organization. - Use a PEST or PESTLE analysis to help identify factors

The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective. The factors may include all of the 4P's; as well as personnel, finance, manufacturing capabilities, and so on. The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix.

SWOT analysis is just one method of categorization and has its own weaknesses. For example, it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. It also presents the resulting lists uncritically and without clear prioritization so that, for example, weak opportunities may appear to balance strong threats.

It is prudent not to eliminate too quickly any candidate SWOT entry. The importance of individual SWOTs will be revealed by the value of the strategies it generates. A SWOT item that produces valuable strategies is important. A SWOT item that generates no strategies is not important.

Use of SWOT Analysis
The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT analysis may be used in any decision-making situation when a desired end-state (objective) has been defined. Examples include: non-profit organizations, governmental units, and individuals. SWOT analysis may also be used in pre-crisis planning and preventive crisis management.

PEST
As part of the development of strategies and plans to enable the organization to achieve its objectives, then that organization will use a systematic/rigorous process known as corporate planning. SWOT alongside PEST/PESTLE can be used as a basis for the analysis of business and environmental factors.[ 8]


 * Set objectives – defining what the organization is going to do
 * Environmental scanning
 * Internal appraisals of the organization's SWOT, this needs to include an assessment of the present situation as well as a portfolio of products/services and an analysis of the product/service life cycle
 * Analysis of existing strategies, this should determine relevance from the results of an internal/external appraisal. This may includegap analysis which will look at environmental factors
 * Strategic Issues defined – key factors in the development of a corporate plan which needs to be addressed by the organization
 * Develop new/revised strategies – revised analysis of strategic issues may mean the objectives need to change
 * Establish critical success factors – the achievement of objectives and strategy implementation
 * Preparation of operational, resource, projects plans for strategy implementation
 * Monitoring results – mapping against plans, taking corrective action which may mean amending objectives/strategies.[ 9]

Books
'''Collins, J. C. (2001). Good to great: Why some companies make the leap--and others don't.'''

'''Kawasaki, G. (2004). The art of the start: The time-tested, battle-hardened guide for anyone starting anything.New York: Portfolio.'''

'''Saito, L. D., &amp; National Collegiate Inventors and Innovators Alliance. (2002).''' Getting started as an entrepreneur: A guide for students.

'''Senge, P. M. (2006)'. The fifth discipline the art and practice of the learning organization. '''

Wheelan, C. J. (2002).''Naked economics: Undressing the dismal science. '''

Websites
General info on enterprise creation – http://www.entrepreneur.com

UMass Entrepreneurship Club – http://www.entreclub.org

Business plan writing software and assistance – http://www.bplans.com

see also their mission statement page, which is a good and succinct description of what mission statements are and should behttp://www.bplans.com/dp/missionstatement.cfm

Articles
Entrepreneurial Development .pdf article:  http://edq.sagepub.com/cgi/content/abstract/15/1/3

Abstract: In this conceptual and practical article, the authors suggest an alternative to the current paradigm for developing enterprises in local communities and regions through out the United States. They also propose implementing a new approach, called the entrepreneurial development system, for transforming community economies. They First layout the specifications for the new paradigm, drawing distinctions between current practice and their proposal. They then describe the major components of their proposed enterprise development system; detail its benefits to entrepreneurs, service providers, and the community; and discuss challenges to its full-scale implementation. Throughout, implications for further research suggested by the new paradigm are noted.&lt;o:p&gt;&lt;/o:p&gt;

Class Handouts
A collection of helpful papers from a Social Entrepreneurship class taught in the spring can be found here: Social_entrepreneurship_collection_of_papers.pdf

= Planning =

BRENDAN check this out, might help describe planning: http://ctb.ku.edu/en/promisingapproach/index.htm

What is your enterprise?
Mission Statement: Your enterprise's mission statement is a concise and clear explanation of your venture's purpose.

It should identify key information like:


 * What does your venture do?
 * Who do you serve? Who is your target market?
 * What are your venture's goals?

To read more about how to write mission statements and see some examples of real mission statements please visit, http://www.businessplans.org/mission.html.

The Description of your service or product should:


 * highlight your product's special features
 * address your target market
 * demonstrate why your product or service is superior
 * how your service will be sustainable

Goals:

How will you get there?
Business/Organizational model: The way your organize your business model is very important to the success of your business. Here are some examples of organizational structures you could implement in the creation of your social venture, to help organize these structures we group them into three groupings, embedded, Integrated, and external structures.

EMBEDDED STRUCTURES--a business whose business activities and social programs are not separated


 * Entrepreneur Support Model
 * Market Intermediary Model
 * Employment Model
 * Fee-For-Service Model
 * Low Income Client as Market Model
 * Cooperative Model

INTEGRATED STRUCTURES--A business whose social programs overlap with their Business activities


 * Service Subsidization Model

EXTERNAL STRUCTURES--A business whose social programs are distinct and separate from their business activities


 * Organizational Support Model

To read more about how to create a business model, a good resource is http://business-model-design.blogspot.com/2005/11/what-is-business-model.html

Reaching your customer:

Perhaps one of the biggest challenges involved with creating a successful and sustainable business is how to reach your targeted customer base. To help your do this it is good to research your target market and respond to their wants and needs, good things to do would include creating a promotional strategy and doing market research. Make your business visible and make sure you communicate to your customers your purpose, any moral/ethical/political positions that you want to communicate to your target market. Its also good to maintain transparency when dealing with your customers, create trust between them and your business so they will keep coming back.

For more advice on reaching your customers visit http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073918813

Action plan:

An Action plan can be a very strategic and useful tool, identifying your goals and how you plan to achieve them. Create a step by step list of what you need to do to achive your goal and then do the steps. Your action plan should be continually reevaluated over time and fully realize your businesses past growth and plans for the future.

A website that gives good information on writing career action plans that could still be useful to creating your business action plan is

http://www.mindtools.com/pages/article/newHTE_04.htm

When?
Action plan timeline: Its also very important to, once you've created your action plan, to set up a timeframe for accomplishing your goals. This way you can set a realistic date for completing your action plan and be able to evaluate how successful you've been in completing the steps of your action plan.

Who?
Competition: An important part of doing market research is knowing who your competitors are, what their promotional and growth strategies are, and how you plan to respond to them. Even going on their website to read their mission statement, ethical standards, action plan, etc.. can be very valuable to how you plan the growth of your business and how to be more competitive in your market.

Customers: As we mentioned above, its of the utmost importance to your success to know your customers, know what they want, and respond to their wants and needs. Some ideas of what could be contained in a promotional strategy can be found at, http://www.nfib.com/object/3747917.html,

For more information visit: http://www.scips.org.uk/promtoolindex.html

http://tutor2u.net/business/marketing/promotion_pushpull.asp

Team/Collaborators: Also something that is very important to the success of your business is knowing your employees, partners, and collaborators. You need to know how to motivate them, keep them happy, respond to their input about the business, and how to create a cohesive business team. A great example of both how to know your employees and your customers is Google, to read their philosophy visit http://www.google.com/support/jobs/bin/static.py?page=benefits.html

Work environment: In the same vein, its important to create a work environment that is conducive to what your business wants to accomplish. It will help keep your employees happy and will definitely effect your productivity, and once again google is a good example of creating a productive work environment conducive to the creative growth they want to see.

To check out the top ten awesome places to work, and get some ideas of how to affect your work environment please visit: http://positivesharing.com/2006/10/10-seeeeeriously-cool-workplaces/

How Much?
Budget for startup: Its important to know how much money you will need to start your business, what sort of capital you'll need when you're starting out, how many employees you'll have and how much they'll get paid, how much you'll spend on promotion, etc.. If you're pitching your venture to a possible investor, they will want to know how much you will need and how you plan to sustain your business. Budgeting is something you will need to learn how to do quickly, so you can continue to manage your business and see to it that is succeeds.

heres a link to 10 online budgeting tools you can use to help you manage your business's money, http://www.doughroller.net/2007/11/09/10-online-budget-tools/.

First year operating expenses: Often when you start your business you won't be making good profit for a number of years, and so its very important to see how much money it will take you to establish your business and start seeing greater returns. You should look at your fixed costs, legal costs, costs of producing or of the service you provide, and continue to evaluate these to stay on top of your business's financial situation.

Income projection: When planning your anticipated growth, your costs, and the future of your business take into account an assessment of your projected income to help you plan strategically what to spend your business's money on. It will also be important when talking to investors, possible partners, etc.. because they will want to know what sort of returns they will see from their investment.

Why?
Vision: Developing a vision is a key part of starting your business because it helps you to identify your goals, decide on your ethical standards, and inspire the future of your growth.

" A vision statement is a vivid idealized description of a desired outcome that inspires, energizes and helps you create a mental picture of your target. It could be a vision of a part of your life, or the outcome of a project or goal."

http://www.timethoughts.com/goalsetting/vision-statements.htm

= Capital =

Capital comes in many forms, but can be broken down into three main groups: Economic, Social, and Environmental.

Articles
This is an article on different types of capitol:

http://www.conservationeconomy.net/pattern_map/flash/index.html

This is an article balancing multiple bottom line (not just economic bottom line):

https://athena.hampshire.edu/S296108/modules/NS-Upload/uploads/33971_2008F/readings/the_company_we_keep_-_chapter_4__balancing_multiple_bottom_lines.pdf

Tools and Tips Related to Capital



==== Introducing Johnny Money 10/ 23/ 2008

Have you always wanted to start your own business but were afraid to take the plunge? Entrepreneurship is rewarding, but isn't for the feint of heart. So to help aspiring entrepreneurs get a glimpse into the business world--for free--NFIB's Young Entrepreneur Foundation has teamed up with the Societal Wealth Program of the Wharton School at the University of Pennsylvania to create Johnny Money: Online Game.

Johnny Money: Online Game is part of NFIB's Entrepreneur-in-the-Classroom program, and is an Internet-based computer game designed to show high school students what it's like to run their own business. Its interactive interface helps students learn about the day-to-day operations--including the risks and rewards--of small business ownership.

Through playing the game, students will be able to:


 * Utilize experiential learning as a tool to aid in retention of entrepreneurial concepts
 * Create, maintain, analyze and influence the essential factors in a successful virtual small business
 * Experience, engage and interact with entrepreneurial decisions and events in a virtual setting

Johnny Money: Online Game takes a minimum of 45 minutes to complete and can be paused at any point to allow multiple completion options. Students can complete the game in one day, spread it out over several days or take it home as homework. Students can also choose to play the game individually or on a team.

Ready to see what owning your own business would be like? Head over towww.johnnymoney.com and press "Play" to begin your entrepreneurial adventure today

= Social Capital =

Social capital is a concept in business, economics, organizational behaviour, political science, public health, sociology and natural resources management that refers to connections within and between social networks as well as connections among individuals. Though there are a variety of related definitions, which have been described as "something of a cure-all"[ 1] for the problems of modern society, they tend to share the core idea "that social networks have value. Just as a screwdriver (physical capital) or a college education (human capital) can increase productivity (both individual and collective), so too social contacts affect the productivity of individuals and groups".[ 2]

Human capital
refers to the stock of skills and knowledge embodied in the ability to perform labor so as to produce economic value. Many early economic theories refer to it simply as labor, one of three factors of production, and consider it to be a fungible resource -- homogeneous and easily interchangeable. Other conceptions of labor dispense with these assumptions.

Knowledge as Capital

 * Expandable and self generating with use: as doctors get more experience, their knowledge base will increase, as will their endowment of human capital. The economics of scarcity is replaced by the economics of self-generation.
 * Transportable and shareable: knowledge can be moved and shared. This transfer does not prevent its use by the original holder. However, the transfer of knowledge may reduce its scarcity-value to its original possessor.

Public Relations
Public relations is a key component to any venture, this includes everything from contacting the media, to coming up with a gimmick.

This website will give you tools, strategies, and advice for your business' PR campaign: http://www.nfib.com/page/PR.html

Promotional Campaign
Promotion and especially knowing who you are advertising to can make or break any enterprise. Social ventures are no different, promotion of your organization and its efforts for social action can result in more customers, clients and investors.

This website will give you tools, strategies, and advice for your advertising campaign: http://www.nfib.com/page/advertising.html

This link will give you tools, strategies, and advice for creating a brand and image for your social enterprise: http://www.nfib.com/page/brand.html

Networking
Explanation of networking and helpful methods such as meet and greet techniques... etc.

A helpful guide to creating and maintaining coalitions and partnerships is located here: http://ctb.ku.edu/en/dothework/tools_tk_content_page_72.htm

Ask an Advisor for Advice on your Community Work
Questions about community work?

Ask specific questions of experienced community members and experts about issues relevant to your community work:

http://www.myctb.org/en/AskAnAdvisor.aspx

Here is a very helpful table of contents related to community work: http://ctb.ku.edu/en/tablecontents/index.htm

Connecting With Other Organizations
Many community improvement organizations are willing to help other social entrepreneurs if they can. To find out which can help you check out this link to a list of community organizations to connect with: http://ctb.ku.edu/en/connect/Links.htm

The Art of Schmoozing
The first impression is very important when meeting potential clients, investors or even possible contacts. Here is a quick bullet list of helpful tips to help create a positive first impression


 * Handshake should be firm (no one likes a dead fish in their hand), Also the handshake should be a few pumps then end (you are not holding their hand)
 * What to say when you first meet a new contact is important. Your introductory sentence should not only tell who you are and what you are interested in, but also give the person something to respond to in order to start a conversation. Your first three sentences can either open or close the conversation even if you don't mean too.
 * What you should exchange when you meet someone: Business card if you have one, but more specifically email addresses, telephone number, Name of person and organization, pretty much anything you want on your contact list. It can be helpful to write down a note next to this information about the person you have just met, even something from the conversation you have just had with the potential contact to be referenced later when you try to contact them so that they can remember you easily.

Contact List
Each entry into contact list should include as much relevant information as possible. The people on your contact list are very important, never assume someone you know shouldn't go on the list because they are not in a certain field, they may know someone who is which is just as good.


 * Name of entry
 * Brief bio explaining why they can help/we can help them
 * How we know them
 * Email address
 * Phone number
 * Address
 * Relevant contacts
 * Any projects currently engaged on
 * Any proposals or ongoing work

Here is how SEARCH groups our contacts into list for faster reference:

Alumni List, Students List, Parent List, Faculty List

= Economic Capital =

Financial capital refers to the funds provided by lenders (and investors) to businesses to purchase real capital like equipment for producing goods/services. Real capital comprises physical goods that assist in the production of other goods and services, eg. shovels for gravediggers, sewing machines for tailors, or machinery and tooling for factories.

Financial capital is provided by lenders for a price: interest. Also see time value of money for a more detailed description of how financial capital may be analyzed.

Furthermore, financial capital, or economic capital, is any liquid medium or mechanism that represents wealth, or other styles of capital. It is, however, usually purchasing power in the form of money available for the production or purchasing of goods, etcetera. Capital can also be obtained by producing more than what is immediately required and saving the surplus.

Sources of capital

 * Long Term - usually above 7 years
 * Share Capital
 * Mortgage
 * Retained Profit
 * Venture Capital
 * Debenture
 * Project Finance


 * Medium Term - usually between 2 and 7 years
 * Term Loans
 * Leasing
 * Hire Purchase


 * Short Term - usually under 2 years
 * Bank Overdraft
 * Trade Credit
 * Deferred Expenses
 * Factoring

Capital Market

 * Long-term funds are bought and sold:
 * Shares
 * Debentures
 * Long-term loans, often with a mortgage bond as security
 * Reserve funds
 * Euro Bonds

Money market

 * Financial institutions can use short-term savings to lend out in the form of short-term loans:
 * Credit on open account
 * Bank overdraft
 * Short-term loans
 * Bills of exchange
 * Factoring of debtors

Links to tools and strategies
Here is a link that has tools, strategies and advice on financing, banking and accounting: http://www.nfib.com/page/finance.html

Here is a link to tools, strategies and advice on cash flow of your business: http://www.nfib.com/page/cashFlow.html

Here is a link to tools for taxes: http://www.nfib.com/page/taxesTools.html

Need equipment? Here is a guide that will help you with leasing, loaning and buying equipment: http://www.ecapitalllc.com/toolbox/equip_lease.asp

Venture Capital strategies and tools link: http://www.ecapitalllc.com/toolbox/venture_cap.asp

= Environmental Capital =

= Sustainability =

=== Sustainability can be seen as the capacity to maintain a certain process or state indefinitely. The concept of sustainability applies to all aspects of life on Earth and is commonly defined within ecological, social, and economic contexts. Even within economic contexts, ecological and social capital must be given significant value as well for it is the only way to ensure wholistic sustainability. ===

Tools:
Triple Bottom Line

In practical terms, triple bottom line accounting means expanding the traditional reporting framework to take into account environmental and social performance in addition to financial performance.

The concept of triple bottom lines demands that a company's responsibility be to 'stakeholders' rather than shareholders. In this case, 'stakeholders' refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder (owner) profit.

"People, Planet and Profit" is used to succinctly describe the triple bottom lines and the goal of sustainability. The phrase was coined for Shell by SustainAbility though the concept originated from the 20th century urbanist Patrick Gedde’s notion of Folk, Work, and Place.

"People" can also be called social capital and pertains to fair and beneficial business practices toward labor and the community and region in which a corporation conducts its business. In concrete terms, a triple bottom line business would not knowingly exploit a community or its labor force and would seek to "give back" by contributing to the strength and growth of its community with such things as health care and education.

"Planet", also known as natural capital refers to sustainable environmental practices. A triple bottom line company endeavors to benefit the natural order as much as possible or at the least do no harm and curtail environmental impact while trying to reduce its ecological footprint. “Cradle to grave" is uppermost in the thoughts of TBL manufacturing businesses which typically conduct a life cycle assessment of products to determine what the true environmental cost is from the growth and harvesting of raw materials to manufacture to distribution to eventual disposal by the end user. Ecologically destructive practices, such as overfishing or other endangering depletions of resources are avoided by triple bottom line companies. Often environmental sustainability is the more profitable course for a business in the long run.

"Profit" is the bottom line shared by all commerce, conscientious or not. In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the economic benefit enjoyed by the host society. Therefore, a triple bottom line approach cannot be interpreted as traditional corporate accounting plus social and environmental impact. The Global Reporting Initiative (GRI) has developed guidelines to enable corporations and NGO’s alike to comparably report on theimpact of a business.

Quantifying the social bottom line is relatively new, problematic and often subjective. Generally, sustainability reporting metrics are better quantified and standardized for environmental issues than for social ones. A number of respected reporting institutes and registries exist including the Global Reporting Initiative, CERES, Institute 4 Sustainability and others. With the emergence of an externally-consistent green economics and agreement on definitions of potentially contentious terms such as full-cost accounting, natural capital, and social capital, the prospect of formal metrics for ecological and social loss or risk has grown less remote through the 1990s.

• Adapting to new business sectors: Since many business opportunities are developing in the realm of social entrepreneurialism, businesses hoping to reach this expanding market, must design themselves to be financially profitable, socially beneficial and ecologically sustainable or fail to compete with those companies who do design themselves as such. For example, Fair Trade and Ethical Trade companies require ethical and sustainable practices from all of their suppliers and service providers. A business which is planning to work with Fair Trade or Ethical Trade companies, must design their business model to be tripel bottom lines.

Several books are available on the topic. Among them: • Harvard Business Review on Corporate Responsibility by Harvard Business School Press; • The Soul of a Business: Managing for Profit and the Common Good by Tom Chappell; • Capitalism at the Crossroads: The Unlimited Business Opportunities in Solving the World's Most Difficult Problems by Professor Stuart L. Hart; • The Triple Bottom Line: How Today's Best-Run Companies Are Achieving Economic, Social and Environmental Success -- and How You Can Too by Andrew W. Savitz and Karl Weber; The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line (Conscientious Commerce) by Bob Willard.

Probability and Risk Assessment

Accurate probability judgments are crucial for good decision making. One property of good probability judgments is that they are “well calibrated”, meaning that the proportion of events judged to have a certain probability that actually come occur is equal to that probability. For example, 60% of events judged to have a 60% chance of occuring should actually end up happening. One method for evaluating your calibration is to answer a list of trivia questions and give confidences for each answer. When you finish the set of questions, you construct a "calibration curve" which plots your confidence in answers against the fraction of questions answered correctly. Care should be taken when assessing the risks your business may face - you do not want to spend time and money avoiding or reducing those risks that pose little or no threat to your business. It is helpful to base your risk assessment on two factors: the probability of each risk materializing, and the cost or impact of the problem if it did happen.

A quantitative assessment of your risks would be the numerical product of these two factors. For example, if a risk has a high probability and a high cost/impact then it will get a high risk assessment. Unfortunately, quantitative measures of risk like this are only meaningful when you have good data. It is hard to work out probability without much historical data. Therefore, a more practical approach is to use a qualitative assessment. In this case you use your judgment to decide whether the probability of occurrence is high, medium or low and similarly for cost/impact. Define what you would consider to be low, medium and high cost to your business in whatever terms seem useful, for example: • low - would lose up to half an hour of production • medium - would cause complete shutdown for at least three days • high - would cause irrevocable loss to the business Use the same principles for probability. For example, you might classify as "high probability" something that you expect to happen several times a year. You might classify as "low probability" something that you expect to happen very infrequently.

Diversification

Many small businesses grow by taking opportunities to diversify, although there are risks because of limited resources on all fronts. Diversification can take several forms such as new or related products and services, new markets for existing products, and new products for new markets. Businesses should weigh up the risks and costs of opting for growth carefully against the benefits. Deciding how and when to diversify depends on your having: • thorough market and customer research for the new product or service • a clear development strategy - including trying a new line or service for a short test period with prototypes and test marketing before totally committing to the new project • sales, marketing and supply chain operations that can cope with the added demands

The focus of your strategy should be making sure that your products and services meet customer needs and developing long-term and profitable relationships with those customers. To achieve this, you will need to create a flexible strategy that can respond to changes in customer perceptions and demand. It may also help you identify whole new markets that you can successfully target.

While diversification can pose some risks, it can also limit the impact of changes in the market. In simple terms, if you supply one product or service and it falls out of favour with customers, it leaves you very exposed. If you have two or more products or services and the sales of one of these drops, at least there will be revenue coming into the business through the other. However, if you diversify too quickly, then you could lose track or dilute your core product or service.

Participatory Management Structure

Participatory management structures support beneficiary participation and the practice of empowering employees to participate in organizational decision making. Employees are encouraged to voice their opinions about their working conditions and to participate in organizational learning practices. Participatory management is said to ensure transparency, institutional commitment, accountability and understanding within an organization. It may also lead to the Hawthorne Effect, what was once known as any type of short-lived increase in productivity, but has evolved to what is considered the Continuous Improvement Process (CIP). The CIP consists of a management process whereby delivery (customer valued) processes are constantly evaluated and improved in the light of their efficiency, effectiveness, and flexibility. Valued tactics for feedback, efficiency, and evolution consist of the self reflection of processes, the identification, reduction, and elimination of suboptimal processes, and the incremental, continuous steps, avoiding quantum leaps. An organization can use the Global Reporting Indicator Framework under Sustainability Indicator Reporting to measure their effectiveness in participatory management.

Institutional Commitment to a Shared Vision of Future

Having a participatory and democratic management structure helps create institutional commitment from stakeholders and shareholders. Institutional commitment helps build credibility and accountability which in turn helps increase your social capital and customer base. Furthermore, it helps create a shared vision for the future of your enterprise. When creating a shared vision, the values and principles of your organization should be clearly stated and understood. This is a good time to talk about strategies for how the triple bottom lines will be incorporated and managed.

Sustainability Indicator Reporting

The Global Reporting Initiative is an organization that helps set out certain principles and indicators that organizations can use to measure and report their economic, environmental, and social performance. It is used to benchmark organizational performance with respect to laws, norms, codes, performance standards, and voluntary initiatives; demonstrate organizational commitment to sustainable development; and compare organizational performance over time. The main three components are sector supplements which offer a unique indicating factors for industry sectors, protocols which have a detailed reporting guideline, and national annexes which give unique country level information.

Global Reporting Initiative Framework: http://www.globalreporting.org/Learning/LetsReportTemplate/