Business Operations

Industry Assessment Framework

Introduction

When starting or scaling an employment social enterprise, it is important to be thoughtful and deliberate about what industries to move into. In order to carefully assess potential promising industries, it is important to focus on four areas:

 

 

Industry Assessment Framework No Title

Assessments of the market and of the financial and operational implications of the new venture are standard components of any feasibility analysis. Employment social enterprises, however, must focus also focus on the additional considerations of the ecosystem and jobs. This means thinking carefully about the job training and creation aspect.

This framework is a way to organize and clarify the questions you should consider as you explore new industries. It is likely that your enterprise explores many or all of these questions already, but hopefully this framework is helpful as a way to keep track of the type of things you should be considering. Think through each question, but where you land and what weight you put on each question or category really depends on your own organization and its own goals.

 

Market Assessment

Is this an industry in which it is attractive for your organization to start a social enterprise?

 

Market Assessment

 

Market Size & Drivers:

  • What is the estimated market size overall and across the value chain?
  • What are the key drivers impacting the market?

Value Chain:

  • What does the value chain in this industry look like and what potential business line opportunities are available?
  • What part of the value chain would your organization enter?

Profit Margins:

  • What are the profit margins for different parts of the industry value chain?

Competitive Landscape:

  • Who are the major competitors and what are their strengths and weaknesses?
  • Why do customers buy from them?

Lifecycle:

  • What stage of the lifecycle is the market currently in – Emerging, Growth, Maturity, or Decline?

Trends & Outlook:

  • How has the market changed over the past few years and what is the projected short- and long-term outlook?

Barriers to Entry:

  • What are the barriers to starting a business in this industry – is it easy to enter?

Customers:

  • Who are the different types of customers in this market and what are their buying habits – what and why do they buy?
  • Are there potential anchor customers?

 

Jobs Assessment

Are jobs in this industry a good fit for the target population your organization serves?

 

Jobs Assessment

 

Target Population:

  • Who is the target population your organization is trying to serve?

Barrier Identification:

  • What are the most significant barriers to employment faced by your organization’s target employee population?

Needs Assessment:

  • What are the needs of your target employee population?
  • What support programs does your organization currently have to address these needs?

Job Creation:

  • Will starting a business in this industry empower your organization to create the number of jobs it hopes to create for your target population?

Skill Progression:

  • What types of jobs are available and what skills will workers learn in the different roles – are they difficult skills to learn?

Wage Potential:

  • What is the range of wages for different roles as workers advance?

Training & Certification:

  • What professional training and certifications/licenses are needed for different job functions?

Career Pathway:

  • What skills will workers need to master at each level/function in order to advance within the social enterprise and beyond to a permanent employer?

Skill Transfer:

  • Are the skills learned in this industry applicable/transferable to permanent employment jobs in this or other industries – what other similar industries?

 

Ecosystem Assessment

Does this industry enable social enterprise growth?

 

Ecosystem Assessment

 

Policy Conditions:

  • What are the federal, state, and local conditions like for businesses in general and for social enterprise?
  • Do policies support or hinder growth in this industry?

Regional Fit:

  • Does the target region’s infrastructure, industry players, and labor force align with the characteristics and needs of this industry?

Network Supports:

  • Are there networks, affiliation groups, support organizations, or government partners in the region or sector to support growth?
  • Are there opportunities to partner with other social enterprises?

Past Exemplars:

  • Are there existing social enterprises that have successfully operated in this industry?

Employer Ecosystem:

  • If positions are permanent, will workers have the opportunity to get on a career and wage ladder within companies?
  • Would permanent employers be willing to hire workers from our target population post-social enterprise employment?

 

Financial and Operational Assessment

What is it going to take to effectively operate a business in this industry?

 

Financial Operations Assessment

 

Fit with Organization:

  • Does your organization have the capacity, risk tolerance, and employee support resources to operate a social enterprise in this industry?

Competitive Advantage:

  • How will your business differentiate itself from competitors – why will customers buy from your business?

Startup Costs:

  • How much investment money is needed to start up a business?

Access to Capital:

  • What type of financial capital does your social enterprise need?
  • What types of funding sources are available in this industry at different stages of the company lifecycle – start-up, growth, operational/maturity?

Breakeven Point:

  • How long will it take for the social enterprise to break even on its initial investment costs?

Operational Sustainability:

  • Will the social enterprise be able to cover its business operating costs on a monthly basis in the medium and long-term?

Employee Mix:

  • What is the appropriate balance between permanent and transitional workers for the social enterprise?

Leadership:

  • What qualities does your organization need in a leader to run the social enterprise?

 

Research

Where do we go to find this information?

You may be thinking: great, we have this long list of questions, where do we go to find the answers? As you may expect, there’s no one place that will have all the information you need to make an informed decision. Industry reports will be helpful as well as talking to leaders and experts in field in question. Labor market data will be useful to analyze, particularly databases of job locations. But much of this will need to come from honest discussion and assessment within your own organization over whether something is a good fit or not. Most importantly, be deliberate about figuring out the employment piece of the model and how it would potentially fit.

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