In August, our board of directors held their annual in-person meeting in San Francisco, where they discussed the importance of working towards financial sustainability. Simply put, this means we need to keep costs low and grow our profit margin until we are able to cover our expenses without grant funding. A focus on sustainability will require us to execute four key strategies detailed below. The board worked with our executive director to refine our key performance indicators to align with our focus on sustainability.
1) Increase efficiency
Last year, we created one job for every three people trained on average. To improve our efficiency, we will use a more targeted recruitment while also developing programs to retain agents for longer periods of time. This strategic shift is beneficial for both the organization and the sales agents in that we can re-direct spending from training and recruiting to marketing and inventory, resulting in higher sales and more income for the youth and women we work with. We will still focus on providing ongoing training during our morning meetings so that sales agents can continue their personal and professional development while working with LivelyHoods.
Indicator: Average % Sustainability at the Branch Level
We will look at how well each branch is able to sustain its own operations. For LivelyHoods to become sustainable, each branch will need to cover its own expenses and contribute to covering HQ expenses.
2) Increase the size of our salesforce
We will increase the number of sales agents working for LivelyHoods by opening new branches and ensuring that each branch employs as many agents as it can manage. After opening six branches, we found that each branch has the capacity to successfully maintain a salesforce of around 20 to 30 sales agents. We are working on revising our strategic plan based on our actual performance, which will help us set manageable job creation targets that also align with our financial sustainability.
Indicators: Number of Branches and Size of Salesforce
We will report on the number of branches we are operating as well as the total number of agents actively working.
3) Improve agent productivity
Our sales agents have been selling more, on average, this year and we attribute that to more comprehensive goal setting at the individual, branch, and organization levels. We also created a mentorship program where our top earners are supported by a member of the management team. The more our agents sell, the more income they generate for themselves, and the closer LivelyHoods will get to financial sustainability.
Indicators: Average agent income as % of Goal, Number of Clean Energy Products Sold, and Monthly Sales Revenue as a % of Goal, Amount of Carbon Emissions Reduced as Number of Cars Taken of the Road
Our goal is that all of our sales agents earn above the international poverty line of two dollars per day. We will report on the number of clean cookstoves and solar lamps sold as an indicator of our progress in providing slum communities with access to clean-energy products each month.
4) Increase profit margins
As we continue to increase our sales volumes, we will work with our suppliers to ensure we are receiving optimal bulk pricing and increase our profit margins.
Going forward, we will use these KPIs in September and throughout the rest of the year.