FIP 35: Optimising business models for impact entrepreneurs, with Jon Shepard

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After leaving the army in his late twenties, Jon’s work with the Prince’s Trust set him on a path of finding purpose in his life. Later, Jon worked with Gib Bulloch at Accenture Development Partners in 2003 on a model that became the influence for setting up Enterprise Growth Services at EY. After that experience, Jon realised he needed to do something with purpose rather than going back to the mainstream consulting model, which was high costs, high fees and high margins for large multinationals. He was attracted to social enterprise that were addressing the sustainable development goals through business, as potentially the most scalable and most sustainable way to do that.

On this episode you’ll learn:

Jon’s team does two things: optimise business models and ‘helping businesses get off the back of an envelope’
By ‘optimising business models’ he means identifying how businesses can be profitable i.e. taking significant costs out of the business without affecting the quality of service or product.
With getting businesses into scale mode, they help with things like IT systems, HR strategies, better financial controls and reporting.
The first step in optimising your company and making a push for profitability is to get a clear understanding of the numbers. They do this by collecting all the operational parameters of the business and the ratios between them that characterise performance.
A great example of taking costs out of the business is when moving to a mobile payment platform, so reducing costs of revenue collection.
Once a clear handle on the costs is known, and the main cost drivers are identified, they brainstorm with the management team to come up with solutions that would massively reduce the costs of the business.
This approach is an excellent decision making tool for any senior management to decide where to focus their limited resources on moving to profitability quicker.
EY’s Enterprise Growth Services is a not-for-profit, not-for-loss programme which means nearly 90% reduction in price compared to their maintsream work.
EY focuses on what they call ‘Impact Entrepreneurs’ which are social entrepreneurs plus great creators of jobs in low and middle income countries.

Links to resources