In a recent Linking 2 Learn session, Cluster Mobiliser ROBINS ODIYO shared about income generation and how your Cluster can benefit from being self-sustainable. Here's 8 things we learned...
The need for income generation is high. If you serve your community, you may be receiving funds from donations, contributions or loans. However, these methods alone can lead to over reliance and lack of funds if donors pull away because of various reasons. Having an income generating activity is important because it is self sustaining. It can come in handy when all other options are not available.
Income Generation should concern activities where community members can use skills that they already have. If your activities involve skills that members already have, then you can generate income without using external resources.
There are various income generating activities that your community can have. Some examples include; food drying, processing and preservation, preparation and marketing of dairy products, agricultural production, livestock/poultry/bee farming, selling handicrafts or running a shop.
Your Income Generating Activities should be profitable. As you run your business, the profits will help you become self sustainable. A profitable activity/business means that your returns are higher than the costs involved. It is important to make a clear distinction between your social welfare assistance and a development strategy that focuses on tapping the economic potential of the project.
There are various steps to take in setting up an Income Generating Activity. The first step involves identifying an activity and seeing if it has potential to generate income. It is also important to look at the technicalities involved. At this point, ask questions such as, “Do we have the skills needed?”, “Do we have the equipment for the activity?” and “Is there a management structure?”
Plan before you begin. It is important to do an evaluation of your potential market to identify risks. Also, ensure that all facilities and resources needed to carry out your activity are available in good time and that your operations are also well scheduled. A special focus should also be put into marketing your activity.
Get financing for your Income Generating Activity. Adequate finances play a role in starting up your activity or project. Some ways to finance your activity include using savings if you have them, asking beneficiaries to cover costs, acquiring soft loans, and getting grants. However, grants should be carefully used because they can distort the real costs and profitability of your activity, and also affect your self-reliance.
Training and Capacity Building is important. As your community runs its income generating activity, training and building the capacity of those involved is important because it improves performance and confidence as your activity grows.
If you have an income-generating idea, we have created a simple guide - called a ‘Business Model Canvas’ - that can help you start to make a plan. Click HERE to access it.