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Top tips on how to finance your next big idea
27 July 2016
Faye Lee has been Healthy Waterways’ Chief Financial Officer for the past seven years. Healthy Waterways is an independent, not-for-profit organisation that works with government, industry and the community to protect and improve South East Queensland’s waterways. Faye’s passion for the cause is strong, rivalled only by her steadfast commitment to steer the not-for-profit towards self-sustainability. So when an innovative idea illuminated her thoughts, Faye’s financial knowledge and practices were crucial in turning the idea into reality.
In an Australian-first in 2015, Healthy Waterways released the trial of Water on Tap, the first vending machine in Australia to dispense both reusable water bottles and free chilled water. By giving consumers the simple, accessible choice to re-use their drink bottle and reduce the amount of plastic pollution in local waterways, Healthy Waterways is supporting their mission, their community, and soon, themselves. With a full-scale roll-out planned from March 2017, Faye predicts the project will show a cash return on investment within three years, and a social return on investment almost immediately.
So how did she do it? And what are her tips to help get your innovation off the ground?
1. Invest in Research and Development
Investing time and money into research comes instinctively to this evidence-based organisation. Faye and her team—external consultants were part of the process— gathered current information about waterway pollution, environmental conditions, and consumer and advertiser behaviours (the vending machine includes digital advertising space). With a deep understanding of the issues and the opportunities to address them, Faye fine-tuned the vending machine prototype and the business model that would deliver a solution that could be monetized. The feasibility study was completed with a trial of three vending machines in the Brisbane area. And a follow-up consumer survey has led to a rebranding exercise that will include a new name, Go2Zone. “Our early stages of research and development took time, but it has been worth it”, says Faye.
2. Protect Your Idea
With the help of a patent lawyer, Water on Tap is now protected by an Australian and New Zealand Innovation Patent. That was an important step to take, says Faye: “There is competition in the market, especially for out-of-home advertising. Our vending machine offers advertisers something unique, and the patent protects this potential revenue.”
3. Know Your Numbers
Faye kept detailed records of everything: quotes, receipts, costs. Although external consultants produced the business case for the Board, Faye’s extensive bookkeeping meant that all the numbers were on hand, reducing the organisation’s spend on consultancy hours. And when the Board and potential investors wanted to test the assumptions within the business case, Faye was able to produce the verifying evidence. With that, she was able to gain the confidence and support of the Board and member organisations.
4. Target Your Partners
The market research for the project uncovered potential partners and investors for the project. “We want to work with organisations that have shared markets and social values,” explains Faye. “We also identified the knowledge and skills that we bring to any partnership and the non-financial value, in terms of expertise, that we are looking for in return.” Staying true to its mission has led Healthy Waterways to its partners of choice.
5. Understand it Takes Time
The Water on Tap project has taken three years to get to the launch stage. That’s a significant amount of time taken away from business-as usual-activities. “I invested about five percent of my job to this project over the last three years, but even more of my personal time,” explains Faye.
With strong financial planning and a strategic outlook, Healthy Waterways is looking forward to the launch of Go2Zone in early 2017.
Any information provided is of a general nature. Before making any decisions please ensure you seek appropriate professional advice to ensure it is appropriate to you.
Faye Lee is a member of Chartered Accountants of Australia and New Zealand (CAANZ). Westpac and CAANZ have collaborated to publish the Guide for Community Financial Officers, designed to help financial officers of not-for-profit organisations take on their roles with greater knowledge and confidence. Download your free copy today from http://www.davidsoninstitute.edu.au/community