Ok, so you want to scale. But are you aware of your costs?
You’d be surprised how often organisations don’t have a clear handle on what it really costs to deliver their solutions.
When asked what their costs are, an organisation might say ‘Ehhhh…. the cost of our programme is about $300,000…’, which usually just matches the size of their latest grant. Sound familiar? Even mature organisations with well-evidenced solutions fall into this trap.
If you don’t have a granular understanding of what it costs to actually impact your end users (end user = a user of your solution), you can’t figure out how to scale.
What organisations need to focus on:
If you’re serious about scaling your impact, you need to figure out your specific unit costs, such as:
- Cost per End-User Reached – This is the cost of reaching the users of your solution.
- Cost per Positive Outcome – This is even better, since not everyone will see the results you’re aiming for.
- Cost per Location/Site
- Cost per Cohort
The latter two are especially important if your programmes are organised around specific places.
Why are unit costs so important?
Getting into the nitty-gritty of your costs will help you see more clearly and:
#1 Assess Scalability: See how your solution can expand efficiently.
#2 Identify Payers at Scale: Find out who can fund your solution as it grows.
#3 Improve Cost Effectiveness: Understanding, in detail, how and on what you’re spending will help you get more efficient and make the most of even limited resources.
#4 Bring Partners on Board: Having clear financial data will make it easier to attract serious collaborators.
#5 Forecast/Model the Future: Tied into points three and four, knowing your key unit costs helps you create a more robust plan for future financial needs and impact.
