[FEB 19] BMC/PNL Experiment - Fiji Socon

by

Liv Hendy | 11 months ago | in Social Consulting and Finance - Fiji

BMC Experiment

Purpose: To gather information from FI’s, SME’s and secondary data to create a Profit and Loss (PNL) statement based on assumptions of how PEV would run a Microfinance business in Fiji.

By evaluating the profits and losses of running a MF business in Fiji we can determine its capability and thus viability in the future. Whilst profit isn’t as accurate a measure for a Financial product (due to its inability to capture time values) we believe this experiment is a needed first step in evaluating the viability of the business.

Assumption: It is viable for PEV to run a Microfinance business in Fiji.

Time Box: 2 Weeks

Success Metric: % of profit margin delivered by the PNL statement.

Green Light: Continue to develop the Lean Canvas , and start to look into the development of a product.  

Success point: Reach a profit margin of 30% or higher.

Orange Light:

a) Re-evaluate the assumptions of our assumed losses to verify the figures

b) Re-evaluate the assumptions of our assumed profits and potential financial products.

Potential optimisation can be completed of the existing PNL.

Failure Point: Profit margin is 10% or below.

Red Light: Review the ability to offer a financial product, investigate alternative approaches to our operations.

Experiment build:

1. BMC will be created for SoCon’s MF business (see link for BMC assumptions): https://docs.google.com/spreadsheets/d/1b28ctX5_X4KAGl103gxIEdIZ9YBBGueh9pMYy02K5cQ/edit#gid=0

   1. Assumptions will be made for each section of the BMC operations, backed up by previously found data, investigation and secondary sources.

   2. For each section we will be validating through communicating with relevant parties ie;

      1. Surveying FI’s to validate our operational assumptions

      2. Conducting surveys to validate our assumptions for our perceived CS (SME’s)

      3. Conduct secondary research into other banks BMC’s.

   3. Therefore we will leave with a basic MVP of a BMC for our Socon Business

2. PNL will be used to determine profit margin; link: https://docs.google.com/spreadsheets/d/1U3am9gD1GuwtuYUNqkNPBueRZ7qwae9Bi4UmLlA3-Sk/edit#gid=1865630392

1. Develop a basic PNL template.

2. Design survey questions to ask FI’s and SME’s.

3. Gather data from primary and secondary research into the losses or expenses PEV will have to encounter.

4. Collect data from primary and secondary research into the potential profit PEV can make.

5. Use data gathered on expenses and profit to evaluate the profit margin from our assumptions.

3. Analyse the results from the data collected.

4. Refer back to the success metric to determine the next move.