farm shop: lessons learned from scaling a social … · shop was unique in cifsrf’s phase ii...
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FARM SHOP: LESSONS LEARNED FROM SCALING A
SOCIAL FRANCHISE
McKague, Kevin;Harji, Karim;Jiwa, Farouk;
;
© 2018, CAPE BRETON UNIVERSITY
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IDRC Grant/ Subvention du CRDI: 108126-001-Farm Shop: Scaling Access to Agricultural Inputs
in Kenya (CIFSRF Phase 2)
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FarmShop:LessonsLearnedfromScalingaSocialFranchise
ForStanfordSocialInnovationReview
KevinMcKague
AssociateProfessor
ShannonSchoolofBusiness
CapeBretonUniversity
KarimHarji
ProgrammeDirector
OxfordImpactMeasurementProgramme
SaidBusinessSchool
UniversityofOxford
FaroukJiwa
Co-FounderandChiefInnovationOfficer
FarmShop
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FarmShop:LessonsLearnedfromScalingaSocialFranchise
Inrecentyears,theconceptofsocialfranchisinghasattractedincreasinginterestforits
potentialtoachievesocialimpactsinunderservedmarketsinwaysthatarefinanciallyself-
sustainingandscalable.1Manyorganizationsinvarioussectors–suchasSanergyin
sanitation,VisionSpringineyeglassesandtheHealthStoreFoundationinprimaryhealthcare
clinics–havebeguntotestthispotentialthroughestablishingandgrowingsocialfranchises
toaddressunderservedneedsinhealth,education,sanitation,vision,energy,agricultureand
otherareas.2
Socialfranchising(ormicrofranchising)istheapplicationofprinciplesofbusinessfranchising
(astandardizedandreplicablebusinesssystemforabusinessunit(shop,clinic,etc.)that
reducesriskfortheowner-managers)toachieveasocialobjective.Inadditiontoprovidinga
socialgoodtoendusers,socialfranchisesalsosupportlocalbusinessowner-entrepreneurs
throughsupportsystems(training,accesstofinancing,anefficientsupplychain,etc.)built
intothebusinessmodel.Theparentfranchisororganizationidentifiesanopportunityto
addressasocialproblemthroughdevelopingafranchisingbusinessmodelandenrolls
independentfranchisee-entrepreneurstoenterintoanagreementtorunindividualbusiness
unitsaccordingtotheconceptdevelopedbythefranchisor.
Whenafranchiseejoinsasocialfranchisingnetworktheybenefitfromtheworkthathasgone
intodevelopingandrefiningtheparticularmodelaswellasbenefittingfrombeingassociated
witharecognizedbrand,beingabletosourcefromanefficientsupplychainbenefitingfrom
economiesofscale,andpotentiallyaccessingtraining,financeandothersupportand
professionalservices.Fortheirpart,franchiseesareoftenrequiredtoadheretoqualityand
1Fairbourne,J.S.,Gibson,S.W.,&Dyer,W.G.(Eds.).(2007).Microfranchising:Creatingwealthatthebottomofthepyramid.EdwardElgarPublishing;Kistruck,G.M.,Webb,J.W.,Sutter,C.J.,&Ireland,R.D.(2011).MicrofranchisinginBase-of-the-Pyramidmarkets:Institutionalchallengesandadaptationstothefranchisemodel.EntrepreneurshipTheoryandPractice,35(3),503-531.2Christensen,L.J.,Parsons,H.,&Fairbourne,J.(2010).Buildingentrepreneurshipinsubsistencemarkets:Microfranchisingasanemploymentincubator.JournalofBusinessResearch,63(6),595-601;McKague,K.,Menke,M.,&Arasaratnam,A.(2014).AccessAfya:Micro-clinichealthfranchisedesignedforscale.InSocialFranchising(pp.61-79).PalgravePivot,London.
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customerservicestandards,sharebusinessinformationandgeneratearevenuestreamfor
theparentfranchisorthroughmarginsonproductssold,fixedpayments,orsome
combinationofthetwo.
Basedonourcollectiveexperienceinstudying,advisingandcreatingsocialfranchisesin
Kenya,Bangladesh,Zambia,Uganda,MaliandIndia,3wehavefoundthat,generallyspeaking,
localfranchisee-entrepreneurscanusuallybesupportedtoachievebusinessunitprofitability
(i.e.atthelevelofshoporclinic).Inourexperience,thebiggestchallengebyfarthatallsocial
franchiseesfaceacrossvarioussectorsandcountries,isfindingabusinessmodelthatcan
covertheoverheadcostsoftheparentfranchisorsothatthenetworkasawholecanbreak-
evenandscale.Manyorganizationsthathaveestablishedfranchisingmodelstoaddresssocial
needsareinthemiddleofthisprocessofexperimentingwith,developingandvalidatingtheir
businessmodelwiththiscorechallengefrontofmind.Oneoftheorganizationsexperimenting
withthiscentralsocialfranchisingchallengeisFarmShop,aKenyanagriculturalinputs
franchise.
FarmShopwasfoundedin2012byAshokaFellowsFaroukJiwaandMadisonAyer,tobe
smallholderfarmers’partnerinprosperitybyprovidinginputsthatincreasefarmers’
productivity,incomesandfoodsecurity.Byearly2018,FarmShophadgrowntoanetworkof
74shopsserving30,000smallholderfarmers,50percentofwhomarewomen.FarmShop’s
visionwasthatifitcouldbreak-evenandreachfinancialsustainability,itcouldscaletoa
networkofhundredsandthenthousandsofshopsinKenya,EastAfricaandbeyond.
Withthecorechallengeofsustainabilityandscaleinmind,in2015,FarmShoppartnered
withateamofspecialistresearchersandcollaboratorsandreceivedanimplementation
researchgrantbytheInternationalDevelopmentResearchCentreandGlobalAffairsCanada
undertheCanadianInternationalFoodSecurityResearchFund(CIFSRF)PhaseII,which
aimedto“toscaleupresearchresultsandinnovationstoreachmorepeopleandhavea
3SeeMcKague,K.,Wong,J.,&Siddiquee,N.(2017).Socialfranchisingasruralentrepreneurialecosystemdevelopment:TheCaseofKrishiUtshoinBangladesh.TheInternationalJournalofEntrepreneurshipandInnovation,18(1),47-56;McKague,K.,Menke,M.,&Arasaratnam,A.(2014).AccessAfya:micro-clinichealthfranchisedesignedforscale.InSocialFranchising(pp.61-79).PalgraveUK;Jiwa,F.(2007).HoneyCareAfrica.Microfranchising:Creatingwealthatthebottomofthepyramid,149-163.
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greaterimpactgloballytoimprovefoodsecurity.”4AnearlierPhaseIroundofgrantshad
focusedonincubatinginnovationstoimprovefoodsecuritysuchasnewvaccines,seeds,
fortifiedfoods,etc.PhaseIIshiftedtheemphasistounderstandinghowinnovationscanbe
scaledthroughprivatesectororganizationslikeFarmShop.TheresearchprojectwithFarm
ShopwasuniqueinCIFSRF’sPhaseIIportfoliointhatFarmShopwasasocialfranchiserather
thanatraditionaldevelopmentproject,researchcenterornon-governmentalorganization.
TheoriginalideaforFarmShopemergedfromFaroukandMadison’spreviousworktogether
atHoneyCareAfrica,asocialenterpriseoperatinginKenya,TanzaniaandSouthSudanwhich
isnowEastAfrica’slargestproducerofhoney.WhenHoneyCareAfricaneededabusiness
partnertodistributebeehivesandbee-keepingequipmenttoruralfarmersinKenya,they
couldn’tfindanyorganizationwithamodern,efficient,coordinateddistributionnetworkto
supplytosmallholderfarmers.Seeingthischallengeandopportunity,theideaforFarmShop
wasborn.
ASocialFranchisingModelforSmallholderFarmers
FarmShop’sbusinessmodelwasbeingdevelopedtohelpaddresstheworld’sfoodsecurity
challengewhere,globally,795millionpeoplearefoodinsecure.5TheWorldBank’sresearch
hasidentifiedthatifsupportedcorrectly,growthintheagriculturalsectorcanbeatleast
twiceaseffectiveatreducingfoodinsecurity,alleviatingpovertyandimprovingthelivesof
smallholderfarmersthangrowthinothersectors.6However,tobesuccessful,agriculture-led
growthrequiresarevolutioninproductivityandprofitabilityinsmallholderfarming.7While
greenrevolutionshavemorethandoubledagriculturalproductivityinmostoftheworld,
Africahasshownverylittlerelativeimprovement.8ThisstagnationinAfricanagricultural
productivityisduetomanyfactorsincludingthelackofaccesstoproductivity-enhancing
inputsandknowledgeinruralareasbecauseofhightransactioncosts,limitedinfrastructure
4CIFSRFCallforProposals,February2nd,2015.5FAO,20156Curtis,2010.Agriculturalgrowthisatleasttwiceaseffectiveinreducingpovertyasgrowthoriginatinginothersectors.SeeMondiale,B.(2008).WorldDevelopmentreport:agriculturefordevelopment.WashingtonDC:TheWorldBank,page6.7Mondiale,B.(2008).WorldDevelopmentreport:agriculturefordevelopment.WashingtonDC:TheWorldBank.8BMGFcite.
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andinstitutionsandlackofeconomiesofscale.9Perceivingthesechallenges,variousdonors
havedevelopedprojectstosupportagriculturalinputshops,howevertheseinitiativeshave
notbeenfinanciallysustainableorsuccessfulinachievingscale.10
InestablishingFarmShop,FaroukandMadisonwereconsciousofthestrengthsand
weaknessesintheinstitutionalenvironmentinKenya.Theirtargetmarket–smallholder
farmers–werepoor,geographicallydisbursedandrisk-aversewithlowlevelsofliteracyand
cognitivebandwidth.11Womenfarmersfacedadditionalconstraintssuchasmorelimited
accesstocreditandgreaterhouseholdworkloadsandresponsibilities.12Anadditional
challengewasthatcropsandlivestockvariedfromregiontoregionduetoagro-ecologicalsoil
andclimateconditionsaswellaslocalfactorslikeproximitytomarkets.Localentrepreneurs
thatcouldbecomefranchiseesoftenhadlimitedbusinessskillsanddisciplinearound
reinvestingprofitsfromsalesbackintoinventory.Thevaluechainfromformalsector
suppliersofagriculturalinputssuchasfeed,seed,fertilizers,medicines,etc.toindependent
shopswasfragmentedwithlimitedeconomiesofscaleanduncertainlevelsofproductquality
andreliability.
ItwastoremoveobstaclesandreducerisksforfarmerandfranchiseesuccessthatFarmShop
developeditssocialfranchisingbusinessmodel.Likeothersocialfranchises,thekeychallenge
toscalewouldbetodevelopabusinessmodelthatwouldgenerateenoughincometocover
theoverheadcostsoftheparentfranchiseorganization.FarmShopgeneratesrevenueonthe
marginsitearnsbetweenpurchasingagriculturalinputsfromsuppliersandsellingthemto
franchisees(seefigure1).FarmShopsellsabout700SKUsineightmajorproductcategories:
animalfeeds,veterinarymedicines,minerals,day-oldchicks,seeds,fertilizers,agrochemicals,
9Mondiale,B.(2008).WorldDevelopmentreport:agriculturefordevelopment.WashingtonDC:TheWorldBank,page12.10See,forexample,“TheADAPTProjectinZambia:SuccessesandLessonsinBuildingaScalableNetworkofRuralAgro-DealerstoServeSmallholders”(2010).Atlanta:CAREUSA.FarmShopboardmembersFaroukJiwaandChristianPennottiservedasadvisorstothisinitiativewhichreceivedfundingfromtheRockefellerFoundationandAGRA(AllianceforaGreenRevolutioninAfrica).11ACUMENandBainandCompany.(2014).GrowingProsperity:DevelopingRepeatableModels.Availableat:http://acumen.org/growing-prosperity/;HYSTRAHybridStrategiesConsulting(2015).Smallholderfarmersandbusiness:15pioneeringcollaborationsforimprovedproductivityandsustainability12McKague,K.,(2014).Gender.InMcKague,K.&Siddiquee,M.MakingMarketsMoreInclusive.NewYork:Palgrave.
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andequipment.Theyalsoreferfarmerstoavarietyofservicesincludingveterinaryservices,
artificialinsemination,andsoiltesting.
Figure1:FarmShop’sSocialFranchiseBusinessModel
Intheblueprintstagesofbusinessmodeldevelopmentbeforeitopeneditsfirstshop,Farm
Shopdrewonresearchandthefounders’experienceinseveralcountriestoestimatethat,
withsomesmallbutcriticalimprovementsintheexistingsupplychain,anaverageshopmight
sellUS$5,000permonthwitha10%marginretainedbyFarmShop.Withheadquarters
overheadsatroughlyUS$1Mannually,initialestimateswerethatthenetworkcouldbreak-
evenataround150shops.
Feed Seed and Other Refe,-m|5
Company FertifizerCompany Agro-inputs to Services
SUPPLIERS
Market & Demand Training & Technzflogy Franchise Information,
FARM SHOP Creation Certification Platform Operating Manua‘ Capaciw Bu_i|dimJ& Processes & Education
:
EUFRANCHISEES
SMALLHOLDER
FARMERS
7
FarmShop’sapproachwasprimarilyaconversion-franchisingmodelwhereexisting
independentagro-dealershopswouldbeconvertedintoFarmShopbrandedshops.InKenya,
thenormisforexistingagrodealershopstobeoperatedbehindmetalbarswherecustomers
can’tbrowseproducts,seepricesorchoosebetweenvariousproductofferings.Asaresult,a
senseofdistrustbetweenfarmersandshopownersisgenerated.Farmerscan’ttellbylooking
iffeedshavefillers,ifseedswillgerminateintothevarietiespromisedorifanimalmedicines
arelegitimate.Becauseoftheseconstraintssmallholderfarmersface,includingtheir
vulnerabilitytotheclimateandinabilitytoreversepurchasingdecisions,buildingtrustwith
farmerswasessentialtoFarmShop’ssocialfranchisingmodel.Onewaythiswasachieved
wasadramaticallydifferentshopformatandrelationshipbetweenfarmer-customersand
franchiseebusinessowners.Premiseswereopentoallowproductinspectionandcomparison,
priceswereclearlylabeledonallproducts,andshopownersweretrainedtoprovide
informationtofarmersonselectingproductsthatwouldbestmeettheirparticularneeds.All
productsweresourcedthroughreputablesupplierstoguaranteequalityandauthenticityand
shopownersandtheirshopassistantsreceivedtrainingincustomerscare,agricultural
practicesandanimalhusbandrysotheycouldhelpfarmersmakethebestchoicesfortheir
livelihoods.
In2012,FarmShopconverteditsfirstindependentagrodealerstoFarmShopswith
cofounderFaroukJiwausinghisapartmentastheorganizationsfirsttemporaryinventory
warehouse.FarmShopmoreorlessdoubleditsnumberofshopseveryyearinitsearlyyears,
with12shopsin2014and25in2015and48in2016.AsFarmShopgrew,increasing
evidencewasaccumulatingthattheopenshopformat,qualityproducts,informativeand
helpfulservicemodelintroducedbyFarmShopwasbenefittingfarmersaswellasthebroader
ruralentrepreneurialecosystem.Forexample,otherlocalagro-dealershopsbegantocopy
theopenshopformatandlayoutofFarmShops.AsthehighestformofrecognitionofFarm
Shop’sachievement,acompetitorenteredthemarkettostartasimilarfranchisenetwork.
AsFarmShopgrewquicklyandexpandedunderthesupportoftheCIFSRFimplementation
researchproject,itworkedovertimetodevelopinformationsystemsthatcouldtestthe
fundamentalfinancialassumptionsonwhichthescalabilityofitsmodelwasbased.
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Developingtheaccounting,inventoryandpoint-of-salesystemswasachallengeinitselfasthe
pieceswerecostlyandcomplextointegratewithfewlocalsuppliersabletoprovidea
comprehensivesolution.However,whendatabegancomingin,itrevealedseveralissueswith
thebusinessmodelthatwouldneedtobeurgentlyaddressedifFarmShopwastostayona
trajectorytowardbreakevenandscale:
• Margins:FarmShopdiscoveredthatsellingagriculturalinputstosmallholderfarmers
isamuchlowermarginbusinessthananticipatedwithaveragemarginsof5percent
onsalesoverallproducts.Animalfeed,whichmadeup75percentofFarmShop’s
sales,hadparticularlylowmargins,atabout3.5percent.Supplierswerelesswilling
thanexpectedtogivediscountsevenatthevolumeofdemandgeneratedby74shops.
Theexistingnetworkofrelationshipsbetweensuppliers,distributors,wholesalers,
sub-distributorswasmorecomplexanddifficulttodisruptthanFarmShophad
anticipated.
• Overheads:Lookingatthenumbers,FarmShopfoundthatoverheadswerehigher
thanexpectedduetothestartupnatureoftheorganizationandthecommitmentto
manydirectsocialimpactactivitieslikefarmertraining.
• FranchiseeProfitability:FarmShopalsofoundthatfewerofitsfranchiseeswereas
profitableasanticipated.Insomecases,openingnewshopswerecostingFarmShop
morethanweregeneratinginsalesmarginsoncetheindirectcostsofmarketingand
supportwerefactoredin.SupportingallfranchiseesrequiredmuchmoreFarmShop
stafftimethanexpectedanddespitethis,thefranchisefailurerateremained
stubbornlyhighat10%annually.
ThedatacominginbasedonFarmShop’saccountingandinventorymanagementsystems
wereunequivocal.Withoutanychanges,FarmShopwouldnotbreakevenandcouldnotscale.
Farouk,Madisonandtheirseniormanagementteamthereforereactedwithaseriesof
strategiestoincreaserevenuesandreducecoststogettheorganizationbackonatrajectory
towardbreakevenandscale.
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IncreasingRevenues
• Moremarginsfromexistingproducts.FarmShopneededtoincreaseitsmargins.
OnestrategyFarmShopdevelopedincludedsellingmorehigh-marginproducts,for
examplehay(25%margin)andmaizebran(10%margin).Theyupdatedtheir
informationsystemtotrackandregularlyreportonsalesmarginsforvariousproduct
categoriesandassignedmanagerstargetsforincreasingaveragemarginsondifferent
typesofproducts.
• Newrevenuestreams.FarmShopalsobegantoexplorenewlinesofbusinessthat
wouldgenerateadditionalrevenuestreams.Asanexampleofthis,day-oldchickswere
addedtoFarmShop’sofferingsandtheybeganscanningtheenvironmentforother
opportunities.
• Morecompany-ownedstores.FarmShop’soriginalbusinessconceptwastohave
franchiseesownallshops.However,afterafewfranchiseesfailedtooperatesuccessful
businessesinotherwisepromisinglocations,FarmShoptookovertheownershipand
managementofsixoftheseshopsandfoundthataveragemarginsitcouldearnwere
about6%higherthaninfranchiseeownedshops.FarmShopbegantolookmore
closelyathowtheycouldincreasethenumberofcompany-ownedshopstoboosttheir
profitability.
• Supportshopsuccess.Giventhemixedsuccessofinitialfranchisees,FarmShop
developedasystemtoevaluatethequalityofitsshopownersandranktheminto
“gold”,“silver”and“bronze”categoriesaccordingtotheirperformance.“Gold”
franchiseeswererewardedwithgreatereligibilitytoaccessfinancingandparticipate
inpilotprojectstestingnewideas.“Silver”and“bronze”franchiseesweresupported
withtargetedinterventionswhereverpossibletoaddressweaknessesandoptimize
businessprofitability.
ReducingCosts
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• Separatefor-profitandnot-for-profitactivities.AmainstrategytoreduceFarm
Shop’sbusinessoperatingcostswasforFarmShoptoseparateactivitiesintothose
managedbyFarmShopretail(afor-profitorganization)andthosemanagedbyFarm
ShopNGO(aseparatenot-for-profitorganization).Byseparatingactivitiesbetween
thetwoorganizationalentities,FarmShopaimstoreducethecoststoFarmShopretail
ofthefarmertraining,researchanddevelopment,andimpactmeasurementfunctions,
whichwillbefundedthroughFarmShopNGO.
• Optimizesupplychainefficiencies.FarmShopbroughtforwardanumberof
strategiestoreducecoststhroughachievinggreaterefficienciesinitssupplychain
fromsupplierstofranchisees.Importantly,FarmShophiredanexperiencednewCEO
withabackgroundindistribution,supplychainandlogisticsmanagementwitha
mandatetobringFarmShopinlinewithbestpracticesinretailfranchiseoperations.
Activitiesbeingimplementedincludeoptimizingwarehousespaceandtruckdelivery
routes,increasingdirectpurchasingfrommanufacturers(ratherthanwholesalers)and
continuallyassessingmarketpricestoensurecompetitivenesswhileworkingtowards
reducingcostsandincreasingproductmargins.
• Closeunprofitableshops.AlthoughmanyFarmShopfranchiseeswereprofitable,a
numberhavestruggled,despitetrainingandconsistenthands-onsupportfromFarm
Shopstaff.Oneofthemostsignificantproblemsiswhenfranchiseesfindthemselves
unabletoreinvestprofitsintoinventory,leadingtoadownwardspiralinproduct
availability,customersatisfactionandprofitability.Closingtheshopsthatare
unprofitable,despitebestefforts,isreducingthedrainonFarmShopsresourcesand
allowsstafftosupportthemoresuccessfulshopswhichcreateavirtuouscycleof
incomegenerationandservingsmallholderfarmerswiththeinputsandinformation
theyneed.
Afterseveralmonthsofputtingitsnewstrategiesinplacetoreducecostsandincrease
revenues,Farouk,MadisonandtheresearchteamrecalculatedFarmShop’strajectorywith
thehelpofaspeciallytailoredfinancialmodel.Basedonanumberofassumptionsabouthow
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thefuturewillunfold,projectionsarethatFarmShopshouldnowbeabletobreakevenat
about500shops.Givenitsintensivejourneyonthepathtoscalesofar,dealingwiththeissues
socentraltothesuccessofallsocialfranchises,FarmShophasidentifiedtwooverarching
lessonslearnedforscalingasocialfranchise.
Lesson1:Abusinessmodelneedstobedevelopedandvalidatedbeforebeingscaled.If
eachnewshopopenedcoststhefranchisingnetworkmorethanitgenerates,thesystemwill
scaleitselfoutofbusiness.SocialfranchiseslikeFarmShopoperateincontextswithalotof
uncertainty–uncertaintyaboutfarmer,franchisee,supplierandcompetitorbehaviourand
preferences.Intheearlystagesoflaunchingandbuildinganewventure,manyassumptions
actasplaceholdersuntiltheycanbevalidated.Thepathtoscalecanbeseenasacontinual
processofmakingassumptionsandlearningwhethertheyaretrueornotandcontinually
adjustingbasedonfeedbackanddatafromexperienceinthemarket.AsaFarmShopboard
memberstated,“OneofthethingswehavebeenpromotingatFarmShopisthatallstaff
understandthatwe’reonajourney,we’rediscoveringnewthings,thatwedon’tknowthe
answers.”Fundamentally,beforeanorganizationcanscale,itneedstovalidatethefinancial
assumptionsunderlyingitsbusinessmodelandestablishaclearpathtoprofitabilityand
scale.
Lesson2:Todevelopascalablebusinessmodel,costeffectivelygatheringtherightdata
tovalidatekeyassumptionsisessential.
Datacollectionandmanagementsystemsareessentialtoachievingscaleastheyneedtobe
usedtogathertheinformationthatwilltestfinancialassumptionsandvalidateelementsof
thebusinessmodel.OneofFarmShop’slessonsisthatorganizationsintheearlystageof
developmentfacechallengingchoiceswithrespecttodesigningandinvestingindatasystems.
Afirstchallengeisthatdevelopingtheseinformationsystemsarecostlyintermsoftimeand
money.Thesecondchallengeisthatintheearlystagesofbusinessmodeldevelopmentand
iterationitsnotalwaysclearwhatthemostimportantdatapointsaretomeasure.Asaboard
memberexplained,“WeneedthedatasystemsandITsystemsinplacetosourcerelatively
accuratedata.Weweremakingalotofassumptionsbasedonimperfectdata.Tosomedegree
that’sfine–moststart-upsandgrowingorganizationshaveanissuewithimperfectdata
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becauseitcostsanextraordinaryamounttogetperfectdata.Asyougrowandevolve–the
otherproblemis–you’renotevensurewhatdatayouneed.Alotoftheunderlyingnumbers,
wedidn’trealizeweneededthese,orthatthesewerecriticalnumbers;wehadto
fundamentallychangethemovertimeasweanalyzedwhichdatapointswerereallycritical
andwhichwerenot.”Withoutaccurateandtimelydata,thefundamentalsofthebusiness
modelcannotbetestedandvalidated,whichisanessentialsteponthepathtoscale.
Conclusion
FarmShopisoneofthecohortofpioneeringsocialfranchisesthathaveappliedtheprinciples
offranchisingtoaddressaparticularsocialneed–inthiscase,theprosperity,foodsecurity
andlivelihoodsofsmallholderfarmers.Likeothersexperimentingwithsocialfranchising,
FarmShophasfacedthehardworkofdevelopingabusinessmodelthatcouldgenerate
sufficientrevenuestocoveroverheadcostsandallowthenetworktobreakevenandscale
throughmarketforces.Onthisjourney,FarmShopuncoveredimportantlessonsrelevantfor
allsocialfranchisesatsimilarstagesinthebusinessmodeldevelopmentprocess:makesure
yourfinancialmodelhasbeenvalidatedbeforeembarkingonscale,anddoeverything
possibletogatherthebusinessandfinancialdatayouneedtotestthemodel.Withthese
lessonsinmind,FarmShopandothersocialfranchisescanbeevenbetterequippedtoliveup
tosocialfranchising’spromiseofachievingsocialobjectivesinamoreresourceefficientand
sustainableway.