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| How do you turn a charity into a business ... and why would you? | How do you turn a charity into a business ... and why would you? |
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| In Kenya, one can drive for hours at a time and see village after village with no electricity. One charity cannot solve the problem of power just as they can't solve many of Africa's other big challenges such as clean water, decent education, irrigation, medicine and food. | In Kenya, one can drive for hours at a time and see village after village with no electricity. One charity cannot solve the problem of power just as they can't solve many of Africa's other big challenges such as clean water, decent education, irrigation, medicine and food. |
| Like mobile phones in the past ten years, solar lights will only become ubiquitous when the private sector embraces them; when there's a value chain that incentivises everyone from a large scale importer in Dar es Salaam; to a shop-keeper in rural Zambia; and to everyone in between, including local handymen to fix them when they break or shop-keepers to sell spare batteries. | Like mobile phones in the past ten years, solar lights will only become ubiquitous when the private sector embraces them; when there's a value chain that incentivises everyone from a large scale importer in Dar es Salaam; to a shop-keeper in rural Zambia; and to everyone in between, including local handymen to fix them when they break or shop-keepers to sell spare batteries. |
| Which is why SolarAid, despite its name, has come to believe in a market based approach: selling solar lights, not giving them away. We quickly realised that we needed to commit to this approach and turn our charity project, SunnyMoney, into a social business. To encourage and stimulate the market; not undermine it with any well-meaning charity. | Which is why SolarAid, despite its name, has come to believe in a market based approach: selling solar lights, not giving them away. We quickly realised that we needed to commit to this approach and turn our charity project, SunnyMoney, into a social business. To encourage and stimulate the market; not undermine it with any well-meaning charity. |
| In the past 24 months, we've phased out the aid-based side of our work (big solar panels on schools and clinics funded with donor money). We now focus on building our social enterprise, SunnyMoney. | In the past 24 months, we've phased out the aid-based side of our work (big solar panels on schools and clinics funded with donor money). We now focus on building our social enterprise, SunnyMoney. |
| To change our charitable project into a company, we've had to deal with a huge 'to do' list of legal, financial and cultural changes, but here are four of the most important lessons from our experience so far. | To change our charitable project into a company, we've had to deal with a huge 'to do' list of legal, financial and cultural changes, but here are four of the most important lessons from our experience so far. |
| Think of customers, not beneficiaries | Think of customers, not beneficiaries |
| SunnyMoney is a direct seller and distributor of small, portable solar lights in the rural areas of Africa. We like to think of ourselves as the Carphone Warehouse of solar lights. We don't manufacture. We're technology neutral, selling the lights – branded products made by specialist companies – which our customers tell us they want. It is a better way to operate. Aid is not wasted. Nobody gets a solar light unless they want it (because they have to buy it); so all our customers look after their hard won purchases. We don't talk of 'helping beneficiaries', instead we 'serve customers'. Our customers demand value for money, warranties and after-sales service. So we have to give it (instead of just dishing out aid and expecting them to be grateful). | SunnyMoney is a direct seller and distributor of small, portable solar lights in the rural areas of Africa. We like to think of ourselves as the Carphone Warehouse of solar lights. We don't manufacture. We're technology neutral, selling the lights – branded products made by specialist companies – which our customers tell us they want. It is a better way to operate. Aid is not wasted. Nobody gets a solar light unless they want it (because they have to buy it); so all our customers look after their hard won purchases. We don't talk of 'helping beneficiaries', instead we 'serve customers'. Our customers demand value for money, warranties and after-sales service. So we have to give it (instead of just dishing out aid and expecting them to be grateful). |
| Focus on scale | Focus on scale |
| Our focus is on scale, so we need to sell lots. We've adopted the Bhag (big hairy audacious goal) approach, first written about by Jim Collins in 'Good to Great'. Ours is 'to eradicate the kerosene lamp from Africa by the end of this decade'. Our Bhag has created an urgency, made us more ambitious, creative, braver and obsessed with scale. | Our focus is on scale, so we need to sell lots. We've adopted the Bhag (big hairy audacious goal) approach, first written about by Jim Collins in 'Good to Great'. Ours is 'to eradicate the kerosene lamp from Africa by the end of this decade'. Our Bhag has created an urgency, made us more ambitious, creative, braver and obsessed with scale. |
| Focus on profit | Focus on profit |
| SunnyMoney is now a social enterprise, owned by SolarAid. It has subsidiaries in Kenya, Tanzania, Malawi and Zambia. We have a culture of target-setting and management accountability with a focus on sales, margins and profit. Profit is important to us. We're edging close to breaking even. This will help us to expand across Africa. Profit means we can become self sustaining; not reliant on donors. It dramatically leverages what donor funds we do receive. | SunnyMoney is now a social enterprise, owned by SolarAid. It has subsidiaries in Kenya, Tanzania, Malawi and Zambia. We have a culture of target-setting and management accountability with a focus on sales, margins and profit. Profit is important to us. We're edging close to breaking even. This will help us to expand across Africa. Profit means we can become self sustaining; not reliant on donors. It dramatically leverages what donor funds we do receive. |
| Focus on performance | Focus on performance |
| We're getting better at procurement, logistics and marketing. We've recruited top talent onto our board, including Derry Newman, former MD of Sony UK, who is bringing a rigour and analysis to our decision-making. We're now bringing in performance management systems, enterprise resources systems, direct marketing expertise; everything that will give us an edge and keep us growing faster. | We're getting better at procurement, logistics and marketing. We've recruited top talent onto our board, including Derry Newman, former MD of Sony UK, who is bringing a rigour and analysis to our decision-making. We're now bringing in performance management systems, enterprise resources systems, direct marketing expertise; everything that will give us an edge and keep us growing faster. |
| As a result of these changes, SunnyMoney is now the biggest direct seller of solar lights in Africa by a big margin. We have sold 245,000 lights in the past three years. Of these, 182,500 have been sold in the last eight months. And over 45,000 have been sold in November 2012. | As a result of these changes, SunnyMoney is now the biggest direct seller of solar lights in Africa by a big margin. We have sold 245,000 lights in the past three years. Of these, 182,500 have been sold in the last eight months. And over 45,000 have been sold in November 2012. |
| Turning SunnyMoney from a charity project into a business has been an exhilarating journey. The results have been staggering and, we've only just begun. | Turning SunnyMoney from a charity project into a business has been an exhilarating journey. The results have been staggering and, we've only just begun. |
| It's not that we haven't needed charitable support. We have formed a company out of a charity, using charitable money instead of early-stage investment money. Our donors are enthusiastic about this move to a business mentality, as we're delivering greater impact than we could ever have done by remaining a charity. | It's not that we haven't needed charitable support. We have formed a company out of a charity, using charitable money instead of early-stage investment money. Our donors are enthusiastic about this move to a business mentality, as we're delivering greater impact than we could ever have done by remaining a charity. |
| Steve Andrews is chief executive of SolarAid and SunnyMoney. He tweets as @stevenjandrews | |
| This content is brought to you by Guardian Professional. To get more articles like this direct to your inbox, sign up free to become a member of the Global Development Professionals Network | This content is brought to you by Guardian Professional. To get more articles like this direct to your inbox, sign up free to become a member of the Global Development Professionals Network |
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