Gassing Up, Driving the Vehicle to Enterprise Growth
April 13, 2016/ PEF Communications / Stories
As part of strengthening its partners to be sustainable enterprises, PEF brought together its ten partners for ACE program’s second module that talked about managing working capital.
When social enterprises approach Peace and Equity Foundation (PEF) for support, they usually ask for either of these two things: working capital or capital budget. However, managing cash flow and assessing which kind of intervention suits their need cannot be done without knowledge of the organization’s financial workings.
Hence, as part of strengthening its partners to be sustainable enterprises, PEF’s Accelerating Capacity of Enterprises (ACE) Program brought together all the ten social enterprise partners enrolled in this capacity building initiative for its second module entitled SE 10: Managing Working Capital for Social Enterprises in Cebu City from August 26 to 28. Social enterprise managers as well as board members and staff with finance management functions were present in the workshop.
PEF’s Executive Director Roberto R. Calingo was one of the lecturers for this module. Calingo opened his talk by reminding participants that the performance of their social enterprises affects the economic situation of the households benefiting from them.
He also told frontrunners that leaders shall have an operational understanding of the finances of their organization in order to grow it. “Accountants and finance personnel are there to present you figures but what the enterprise’s strategy will be to facilitate efficient cash flow shall be your call.”
He then proceeded to discussing how to determine one’s working capital needs. Working capital refers to cost needed to fund short-term assets such as raw materials, labor, and other operating expenses. Participants were asked to solve two case studies in relation to the topic to exercise learnings from the lecture.
If working capital is the fuel needed to run a business, capital budget serves as its vehicle. Such refers to the needed resource to acquire long-lived assets such as new equipment or physical store construction.
Toni Rose Abejo, PEF’s Internal Audit Specialist, led workshop on capital budgeting. Among the lessons discussed were analyzing cost, volume and profit to make short-run judgments, using breakeven analysis to determine minimum amount needed to prevent losses, and making sound business decisions particularly on whether to buy or lease assets.
The workshop concluded as participants presented a pitch before four of PEF’s Program Committee members. They were able to articulate how PEF can help in financing their social mission as they apply what they have learned from the previous module and past two days of Module 2.
Cornelio Castañeda Jr., president of Sultan Kudarat Muscovado Farmers Corporation and one of Global Organic and Wellness Corporation’s partners, shared his experience on the workshop. “Sa aming mga baguhan sa enterprise development, napakalaking bagay ng workshop na ito. Eye-opener ang training na ito kung ano ang steps na gagawin para hindi nasasayang ang pera. Talagang magandang maipamahagi ang value of money sa kapwa ko magsasaka sa organisasyon.” (To us who are new to enterprise development, this workshop is a big help. This training is an eye-opener on the steps that we should take in order to prevent money wastage. It will be worth-while to share the value of money to my fellow farmers in our organization.)
