The Business of Social Work Practice

Over the last decade, certainly in Australia, funding for human services organisations has undergone significant change.  The days of filling out an annual evaluation report and expecting to be automatically re-funded are gone. Simply ensuring you meet the objectives of last year’s funding is not enough. A competitive tendering process is now a harsh reality in the realm of community services. What implications does this have for social work practice?

CompetitionFirst of all, we need to get comfortable with the notion of “competition”. It’s a word that doesn’t seem to feel comfortable with most social workers.  And yet, in the tender process, that is exactly what we face.  May the “best” organisation win. No matter what your values and passions may be as a social worker, no matter how much you abhor the thought of competing with another well-meaning, non-profit agency, no matter how much you talk about collaboration and partnerships, the bottom line is that you have to provide evidence that your organisation deserves a portion of limited funding more than another.

Secondly, we need to become acquainted with the word “business”. Traditionally, funding in community organisations is prioritized to the grass-roots workers – those who deliver service to the client group. The rest of the “business” is expected to be run by volunteers. Or the coordinator of the service works double the paid hours to ensure everything is running smoothly at a business level. At times a small portion of funding is reluctantly allocated to a bookkeeper or administrative assistant or allocated to the social workers who are already overloaded meeting client needs. Besides being an unrealistic addition to workload, most social workers do not have an effective skills set in business practice.

This reluctance to allocate funds to the business side of the organisation exists because traditionally, community organisations are “supposed to” spend allocated money on client service delivery. This has been perceived to mean “direct service”.  But tell this story to any small business, or a corporate organisation and they’ll ask “how does your organisation (business) run effectively and professionally without business and marketing expertise? “ Every business knows, to compete effectively in the market place, you need people with both business and marketing skills. Private businesses are born in a tough, competitive market place so this notion is simply accepted as part of business life. Community services however, were born in a “charitable, gentle, cooperative” market place.

Time to wake up – things have changed. As many of the larger community organisations have proven, allocating funds to the “business” side of an organisation enables growth. These large community organisations have whole departments allocated to “operations”, “marketing and communications” and “fundraising”. Those employed to deliver client service are able to focus on just that – their clients. The business side of the organisation is fine-tuned by those with specific skills in those areas. The ultimate result for those organisations is that they’re highly competitive in the tender process. And the more tenders they win – the more their client needs are met.

So how would a small community organisation start the process of being competitive in a business sense when funding is so limited? First of all do what you’ve been taught to do as social workers: look at the big picture.  Empowering your clients is not just about casework and running groups. The stronger your organisation is, the more chance you have of gaining the funds you need to initiate or expand service provision. Then question the status quo. Just because it’s always been done this way, doesn’t mean that’s what works best.

Perhaps the well-meaning volunteer, or the overworked caseworker are not the best people to be focussing on business operations or communications strategies. Where there really is no funding to employ more people, start placing some priority on business practice. Think of ways existing staff and volunteers can be up-skilled so that they understand and possibly assist in strategic planning, fundraising, marketing and business operations. Talk to some of the larger organisations and ask them how they raised the funds to break away from the traditional charitable approach to a solid business approach. They also started out small.

Then ask yourself these questions: How many social workers know how to write up a business plan? Or understand that a marketing plan is an integral part of a business plan? How many social workers understand that innovation and creative thinking are essential elements of any successful and sustainable business?  Or at a smaller level, how many social workers understand how to promote their services to their client base?

Social workers traditionally are not business oriented. Social workers want to see all human services as affordable. But in a world where values change, where government priorities become unpredictable and outcomes are consistently measured according to standards set by external assessors, isn’t it time social workers took on some business sense?  We’re not the traditional “do-gooders” anymore. We’re agents of change. It’s time to look inward at our profession and take some responsibility for the lack of funding to critical operations funding in our organisations.

After all, we continue to accept and work under the premise that our organisations should only allocate funding to direct service, not to administration. Ironically we do this because we’re used to another kind of tender – being gentle.  Ultimately, this quiet acceptance significantly reduces the chances of community organisations gaining momentum and successfully competing for effective client services.  Which tender are you aiming for in your social work practice?

Consulting with Start-Ups (6th in Series)

BUSINESS PLAN

The first and most important task for any start-up is a two-page executive summary outlining your business model. In two pages, you need to be able to summarize the market, operations, management, and financial projections of your new company. It must have real information (not fluff and wishes), and it must build logically. The sections of the executive summary are the same for the lengthier business plan. They are as follows:

  1. Business Name and Legal Status
  2. Market Analysis
  3. Key Objectives
  4. Financial Objectives
  5. Market Opportunities
  6. Market Threats (Competition)
  7. Operations
  8. Personnel & Staffing
  9. Management Team & Governance
  10. Pro Forma Targets (Financial Projections)

“Real information” speaks to the need to gather actual community data toward the representation of your market, logic of your objectives, and efficacy of your financial projections. Census data, consumer research, commerce data, and even verifiable observations made over time can provide a foundation of reality for your projections. Do not express what you think. Communicate what you can support with data

“Build logically” reminds you to connect each part of the summary in a logical chain of support for the business. By the time the reader gets to the Pro Forma Targets, he/she should consider the projections justified by the preceding discussion. While you write, continually ask yourself, “What does the previous section support?”

DON’T QUIT YOUR DAY JOB

There is a reason some of the most successful companies started in basements or garages: Low Overhead! Consider the financial swing from having a job and income of $2,500 per month to quitting the job and hiring a building at $1,200 per month. My advice is to keep your current employment situation while you build your business plan, secure capital, and develop your brand.

Yet, when planning to launch a business while working at another business, keep in mind the policies of your current employer. Policies regarding competition, secondary employment, and intellectual property are of the utmost importance.

Competition

Many employers, recognizing the demand for experienced professionals, now require some form of non-compete clause to be signed as a condition of employment. These contracts usually specify an amount of time that you must wait before engaging in an enterprise that could be seen by your employer as competing. Notice that most contracts allow the employer to determine whether the activity is a competing activity. For example, the employer may ask you to sign an agreement not to accept their former clients as your clients for a period of 2 years after separating from the company.

Some states outlaw the use of non-compete clauses. Employers in these situations may require strict, periodic reporting of your “outside” activities. This could include the amount of compensation you obtain from outside sources and a mandatory conflict of interests review by a risk assessment officer. Realize that not all levels of the human resources chain make this apparent during the hiring process. Read your entire contract and personnel policy documents to know what your employer allows, discourages, and seeks to monitor.

Secondary Employment

Most often, the concern on the part of the employer is to ensure that your business start-up does not infringe on your ability to complete your duties as assigned. You can satisfy this by submitting documentation that your secondary employment occurs during hours that you are not expected to work. For example, if you are employed 9am – 5pm Monday through Friday, you may carry out secondary employment from 7pm – 11pm. If you are on-call during the evenings, you can engage in secondary employment during weekends.

Another concern could be potential conflicts of interest. A conflict of interest exists when your interests compete with the interests of the company. It is important to make your employer aware of potential conflicts of interest and the steps you have taken to ensure that the conflict does not impair your performance, damage the company, or run afoul of ethical conduct. The existence of a conflict does not necessarily mean that the activity is unethical. Many companies have procedures for reporting and monitoring potential conflicts.

Intellectual Property

It is hard to believe that there once was a time when employers did not have specific policies for the inventions and advancements created by their employees. Generally, when you produce something for hire, the entity that pays you owns all the rights to that product. But, this has become an important point of concern, and sometimes litigation, in certain instances.

Many employers now have a thoughtful policy covering intellectual property rights. Intellectual property is essentially the question of rights to your creation—who owns it. It could be unique ways to prop open a door. It could be a line of programming code. Some have argued that it could be a process for checking out in an online store.  Before you produce anything beyond your job description, familiarize yourself with the intellectual property rights of your employer.

Typically, your employer will claim explicit rights to anything you produce with their support. This means that if you use their computers, Internet connection, materials from the break room, copiers, or meeting room space, your employer may claim rights to what is produced. Employers also claim rights to what you produce while you are clocked in or reasonably expected to be “engaged in work for the company.” Be sure to complete paperwork detailing your entrepreneurial work as secondary employment. Do not use materials (even paperclips or recycle-bin bottles) in your inventions. Produce what is yours away from the employer’s offices.

BUILDING YOUR BRAND

When consulting with a start-up, maybe the most challenging task is to assist the entrepreneur to build a brand. A brand, in the sense of branding, is more than the logo or the product or service the business is known by. A brand is a warm feeling that the public gets from the smells, sites, or sounds that your business practices create. It is the association of your company with your product along with some amount of positive regard.

Once you have developed a solid business plan, you must consider your brand. The brand will be built over time, but it is wise to outline its trajectory. Considerations of your brand will influence strategy in hiring, priorities in production, emphasis in marketing, and targets for growth.

First, consider your product. Second, develop the infrastructure for production. Third, create a schedule and mechanism for communicating your impact. To launch you in this process, consider whether your start-up is producing expertise, service, or a product.

Conceptualizing Your Expertise

Experts come in many flavors. Your first task is to specify the outcome to clients who hire your expertise. Articulate the brand of expert you seek to be: Grant Writer, Evaluator, Producer, Subject Matter Expert, Blogger/Copy Writer, Trainer, or Motivational Speaker. Many more options exist.

If the product is expertise, credibility is of primary importance. Credibility can be communicated through degrees, affiliations, or experience. The greatest of these is experience. If you can effectively communicate your experience, you are closer to securing a contract.

Infrastructure for the expert will include a method to capture and present experience in an easily accessible form. For example, a motivational speaker may set-up recordings of presentations she gives and post clips to a promotional website. A blogger may track unique visitor and interactions data among readers to demonstrate the value and influences represented by the blog.

A press kit detailing your credibility will be an important mechanism. In addition to a website listing contact information and examples of your work, a printed press kit is also desirable. As much as our world relies on digital copy, many still enjoy a well-developed printed presentation. Be sure to engage a print designer to take your skills and accent them visually.

Developing Your Service

When you launch a service, your primary concern is to provide the highest quality experience for the client. Consequently, this should be the first process you consider when developing your service. Create a process map, also called service plan, which details the process each client will experience. The process map is a flowchart that utilizes specific symbols to communicate decisions, documentation, and other processes. Include all elements of the process including early exits, disciplinary actions, referral options—any procedures that any client may experience.

A curriculum or mechanism is the infrastructure in a service venture. It answers the question, “How will clients reach the goals your start-up has for them?” It should be specific. For example, if your service is training provided over 8 weeks, you must outline what each of the weeks will entail. Resist the common urge to simply write the topics that will be presented each of the weeks. At least describe the content, the activities, and the resources involved in each week. Other infrastructure for a service venture include policies & procedures, board development plan, accounting plan, insurance & licenses, zoning considerations, and fundraising plan.

I recommend that you keep these items in an organizational compendium. An organizational compendium is my phrase describing the storage place for program and organizational documents. The key feature of the compendium is that the items are centrally housed, digital when possible, and updated regularly. The compendium should be such that everything needed for a grant proposal, press release, or an annual report can be easily accessed.

Constructing Your Product

If you are thinking about launching a tangible product, your primary concern is your market. Your market describes the clients who will purchase your product. You must identify a need and a way to engage the clients with the product satisfying the need. Before you move forward with the considerations of production, calculate whether the market can support your product. That is, figure out if there are enough potential customers to at least break even on the expenses of production. Consider adjusting your price point to increase the pool of customers.

The primary infrastructure for production of a product is your development cycle. The development cycle details your contracts with suppliers, development of content, packaging, distribution, billing and client engagement. You will also want to plan for inventory storage, distributor requirements, support of products, marketing and social media monitoring. Connect with the department of treasury in your state and local government to learn what sales and use taxes you may be required to pay on the sales of your product. Even states that do not require sales and use taxes may require that you report your sales activity.

Financial planning is an important consideration of impact when launching products. Calculation of the break-even is one task. Another is calculating what you need to make the venture worthwhile for you in comparison with other activities. Rather than a vague hope to “make money,” consider the lifestyle you desire. Calculate the amount of income required for that lifestyle. Reflect on the market calculations you have completed. If your market can bear your desired amount, set this as your target and plan your growth and investment accordingly.

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