1. What you will learn
This lesson maps the outcomes you should aim for in the fundraising programme and gives you a diagnostic to see where your business stands today. You will learn to rate five areas of the business, find the weakest, and use that finding to decide whether your first step is fundraising at all or repair work that comes before it.
2. The idea explained
An outcome map connects what you do in the programme to what you hope to be able to say at the end. For fundraising the outcomes are modest and concrete: you can explain in a sentence why you need money and what it changes, you have clean numbers for the last twelve months, you know the cost of each realistic source of money, and you have a plan for what you will do if the answer is no. Notice that none of these is that you have raised money. That result is partly outside your control and no programme can promise it.
A diagnostic is the tool that tells you which outcome is furthest away. Here it uses five areas. Customers: do you know who pays you and why, and how repeatable is it. Margin: do you know what is left from each sale after direct costs. Cash: do you know when money comes in and goes out, and how thin the cushion is. Operations: can the business deliver more without breaking. Records: can you show your figures to a stranger. You rate each area from one to five, where one means little evidence and five means solid, documented evidence.
The point of rating is not to feel good or bad. It is to choose the next piece of work. An average score hides differences, so look at the lowest scores first. A business with strong customers and margin but weak records may only need a few weeks of tidy bookkeeping before it can speak to a lender with confidence. A business with weak margin has a different problem, because more money simply funds more of a loss making activity.
Apply it
3. How to apply it in your own business
Take a page and write the five areas. For each area, write down the evidence you would show a stranger to justify a score of four or five, and then honestly score yourself. Evidence means documents, dates and figures, not opinions. If you say customers repeat, show the count of customers who bought in three or more different months.
Next, write the outcome map in your own words as four or five sentences beginning with by the end of this programme I will be able to. Tie each sentence to the area that supports it. For instance, being able to state the use of funds relies on customers and margin. Being able to survive a no relies on cash. This linking makes it clear which weak area threatens which outcome.
Finally, choose one repair job for the next two weeks based on your lowest score, and write what will count as done. Then repeat the diagnostic after the first reader and compare. Do not be surprised if a score falls because you have learned to be stricter with yourself. A lower and more honest score is progress, since lenders and investors will be strict in any case.
It helps to attach a time and a cost to every repair job you choose. If your records are the weak area, estimate how many hours a bookkeeper would need and what it would cost, and compare that with the cost of approaching a lender unprepared and being turned away. Repair work is rarely glamorous, but it is often the cheapest way to raise the odds that any later conversation about money goes well. Be careful to keep the estimate honest and modest, and remember that even after repair there is no assurance that any funder will say yes.
Worked example
4. Worked example
Consider Rohit, who runs a small dairy products business selling paneer, curd and ghee to about forty households and three restaurants. He scores himself honestly across the five areas.
Customers he gives 4, because thirty of the forty households have bought in each of the last four months. Margin he gives 2, because he has never separated fodder, transport and packaging costs by product. Cash he gives 3, because restaurants pay in about three weeks but he pays suppliers weekly. Operations he gives 2, because the single chiller fails twice a month. Records he gives 3, because he has a notebook and a payment app history but no monthly summary.
The total is 4 plus 2 plus 3 plus 2 plus 3, which is 14. The average is 14 divided by 5, which is 2.8. The lowest scores are margin and operations, both 2.
He also checks one piece of evidence on customers. The three restaurants account for 1,05,000 rupees of his monthly sales of 3,00,000 rupees. The share is 1,05,000 divided by 3,00,000, which is 0.35, or 35 per cent, a concentration worth noting.
His decision is that fundraising is not the first step. The first two weeks go into a product by product margin sheet, and into getting a quote to repair or replace the chiller. If the margin sheet shows that ghee loses money, extra funding would only widen the loss. He will repeat the diagnostic after the next reader.
5. Common mistakes and how to fix them
The first mistake is scoring generously to avoid discomfort. Fix it by requiring a named document for any score of four or five. The second mistake is fixating on the average and ignoring the lowest scores. Fix it by always choosing your next task from the weakest area.
The third mistake is treating funding as the automatic answer to a weak area. Fix it by asking whether money would repair the weakness or merely enlarge it. The fourth mistake is skipping the map and diving straight into pitch decks. Fix it by writing your outcome sentences first, so each piece of work has a purpose you can explain.
An additional fix is to ask one outsider, such as your accountant or a supplier who knows you well, to rate you on the same five areas without seeing your scores. Compare the two sets. Where your own score is two points higher than theirs, you have found a blind spot, and that is exactly the area to check before any outsider with money looks at it.
Key takeaways
6. Board summary
Outcomes here are skills and readiness, not a promise of money raised. Rate customers, margin, cash, operations and records from one to five, with evidence. Choose your next task from the lowest score, not from the average. Money enlarges what already exists, whether that is profit or loss. Repeat the diagnostic after each reader and expect scores to become stricter.
Check your understanding
7. Practice and self-check
- What are the five areas of the diagnostic? Answer: customers, margin, cash, operations and records.
- What does a score of one mean? Answer: little evidence in that area.
- What counts as evidence? Answer: documents, dates and figures that you could show a stranger.
- In Rohit's case, what is the total score? Answer: 4 plus 2 plus 3 plus 2 plus 3, which is 14.
- What is the average? Answer: 14 divided by 5, which is 2.8.
- Which areas are lowest? Answer: margin and operations, each at 2.
- What share of sales comes from the three restaurants? Answer: 1,05,000 divided by 3,00,000, which is 35 per cent.
- Why might extra funding be harmful for Rohit right now? Answer: if a product loses money, more funding simply enlarges the loss.
- Is raising money one of the promised outcomes of the programme? Answer: no, the outcomes are readiness and skills, since a raise cannot be guaranteed.
- Why might a score fall on the second diagnostic? Answer: you have become stricter and more honest, which is progress.