Whether you are seeking to maximise positive social impact, profit or something else, every organisation needs to choose carefully how best to allocate scarce resources to achieve their objectives.
Deciding to pursue the right opportunities is critical for the success of any organisation, and an opportunity analysis is a necessary tool for making those decisions. Maximising your funding means making sure that every ounce of effort really counts.
Opportunity analysis is a way of ranking what you might do with your resources so you can pick the opportunities that deliver the most bang for your buck. It answers the question "is this the best use of our time and money?" In these days of austerity, all social impact organisations need to think in this way.
So how do you put one together?
1. Agree what is important in your assessment
Normally you will assess whether to go for an opportunity based upon criteria that fit into the following categories:
- What do we want to get out of it?
- Can we deliver what is asked?
- What are our chances of succeeding?
- What effort is required?
What do we want to get out of this opportunity?
Your objectives are a good starting point. That might include new revenue, profitability (or ability to generate a surplus), or young people supported. If the opportunity does not contribute to those objectives, then is it really the most effective use of time and money?
Can we deliver it?
If you are bidding to run a service, do you have the experience and capability to do it? Funders will need reassurance that you can before they award funding. Taking on a £1m contract is a very high risk for a £0.5m turnover organisation, and funders will look at your finances to make sure you have the capacity to handle growth.
What are our chances of succeeding?
Your probability of winning matters when deciding whether or not to invest the effort. £1m of funding with a 10% chance of winning is less of an opportunity than £500K of funding with a 30% chance of winning. Ask yourself other relevant questions such as what the strength of your relationship is like with the funder, what are other bidders likely to offer, and how much does the funder want a proposal like yours?
What effort is required?
Estimating effort on opportunities can be quite difficult, but important nonetheless. If you stand to gain £100K from either of two opportunities (adjusted for probability of winning), but one requires twice the effort of another, then you will maximise funding by focussing on the least effort.
Try to whittle the list of criteria down to less than 10 factors, and assign scoring and weighting to them. It is best to go for a simple "0 to 3" score where 3 is positive, 1 is negative and 0 is a big red "NO"-shaped flag. We use spreadsheets for storing opportunities because you can have a lot of records and easily use formulae to do the analysis.
The "analysis" bit comes when you tot up all the scores and come up with a nice overall ranking for what you should be working on.
3. Improve your opportunities
Opportunities for funding are rarely perfectly formed. Having analysed your opportunities, the next step is to try and improve them. Starting with the strongest, there are normally two things to do.
First, qualify the opportunity. Do you have all the information you need to make a decision? Sometimes there are gaps such as a lack of knowledge about competitors, or further information required on the requirements for the funding. If you uncover show-stoppers, then you might need to reassess the opportunity quite drastically.
Second, improve the opportunity. You might have assessed a potential bid as having a 20% chance of winning: you might be one of five likely winners, or you might be up against a really strong single bidder. Think about how you can improve this - perhaps through partnerships, getting to understand the funder, more research, or trying to improve your value for money.
4. Stay lean and mean
Don't turn this exercise into an administrative headache. Use it to focus your efforts and then get on with the job of winning that crucial funding!
The Good Consultancy specialises in helping charities, social enterprises and companies to win funding for social impact projects. If you need support to put in place an opportunity analysis process that is right for your organisation, please contact us.