Our Four Top Strategies for Financial Sustainability for Catalyst Kitchens

It goes without saying that financial sustainability is critical to the success of social enterprise job training programs. Since our model is a complex hybrid between private enterprise and public nonprofit funding, it is important to know where one ends and the other begins. What steps can you take to ensure your food service business and job training program are sustainable and thriving? Catalyst Kitchens has created a content series on financial sustainability to address this fundamental issue in 2019. This will include blogs, interviews with leaders in our field, and self-paced learning through video tutorials and easy-to-use financial templates. To kick off our 2019 financial sustainability content series, here’s a look at four top financial sustainability strategies that we hope can inform your team’s strategy.

1. Community collaboration is fundamental.

Each community is unique, and one size does not fit all. Listen to your community and together you will find the right solution. Our programs are only as strong as their community support, so make sure that your program is providing a necessary service and is serving populations who need the support.  This principle holds true on the social enterprise side as well: is there a market opportunity for a new café in an up-and-coming area, or is your local hospital looking for a dependable food service provider? It is best to put the time into researching the current food industry landscape before determining the right business for your program.

2. Seek consistency in revenue streams and production lines.

Over 98% of Catalyst Kitchens member organizations entered the social enterprise space with some type of contract meal as their anchor business (for example, contracted meals for seniors, shelters, or childcare). This is because these are often annual contracts with a predictable volume of production. This type of business allows for scale and provides a consistent environment for training.

3. Diversify revenue streams.

Never allow your business to rely too heavily on a single contract or client. None of our member organization cover all the costs associated with their training program through profits from their businesses. Instead members work toward generating a modest profit from their business that can offset a small portion of the cost of training. Often food service business managed by nonprofits can break even or run at a loss, at least in the first 18-24 months.  Organizations plan to cover these losses through fundraising until the business is self-sustaining. Diversity of business and funding sources is key to make your program more sustainable.

4. Manage expectations.

Do this constantly with your team, board members, and supporters – especially when launching a new program.  Bring your board and leadership along for the journey. Onboard new board members and leadership about your program and why it is so critical to the organization and the community. Align your program goals with the strategic goals of the organization if your organization’s objective is poverty reduction or hunger relief. Financial sustainability is the cornerstone of Catalyst Kitchens programming - stay tuned as we deep dive into this topic with our member programs!