By Kate Greene, SOM’06

Earlier this year, Community Servings, a Boston-based nonprofit serving meals to the critically ill, contacted my nonprofit consulting firm, TDC, for help with a prospective earned income venture. In the midst of building a new facility that would double its capacity to make meals, the senior staff wanted to know if there was a viable market for selling meals wholesale to other nonprofits, such as charter schools and senior centers.

This was an exciting project for me to take on—the chance to work with an entrepreneurial human services organization to develop a business plan. At SOM, I had worked on similar projects through the Yale-Goldman Sachs business planning competition and learned about earned income ventures through Sharon Oster’s Strategic Management of Nonprofits course, but I could now apply these skills as a professional, post-MBA consultant.

Like most of our projects at TDC, we started by forming a consultant team (including Rehana Abbas ’08 who interned with us over the summer), and then held a series of kick-off meetings with the Community Serving’s senior team. In these meetings, we clarified our understanding of their mission and current operations, and also discussed ideas for the wholesale meals venture. We quickly learned that Community Servings had evolved into a sophisticated nonprofit organization under the leadership of David Waters, the current Executive Director and former General Manager at UpStairs at the Pudding Restaurant in Harvard Square. David, the Executive Chef, and the Director of Finance had been thinking about starting an earned income venture for a while, but like many nonprofit directors they had no time in their overbooked schedules to research and plan the new business.

First, through conversations with the senior team and a review of internal materials, we developed a baseline understanding of Community Servings’ capacity for meal preparation and delivery and costs associated with their operations. Then, we conducted an analysis of the competitive landscape and identified potential customers for the meal service. Through secondary research and more than 30 interviews with organizations that purchase meal services, we developed profiles of competitors in the marketplace that included their customer base, pricing structure, product offerings, and geographic scope. We also discovered that meal vendors achieve competitive advantage through one of two models: either a high volume business that can offer customers a low price or a high quality model that uses fresh ingredients and provides excellent customer service at a higher cost to customers.

We then researched the buyers’ market for wholesale meals service and identified several market segments. Because Community Servings specializes in making nutritious, ethnically appropriate, and medically tailored meals, we examined markets such as schools serving diverse populations and senior centers that cater to the health needs of their participants. We limited our search to the Boston area so that Community Servings could more easily incorporate its meals venture into its existing transportation routes. As a final step in the research process, we drafted pro forma financial statements to show what type of net revenue Community Servings could expect to make through the venture. We held regular meetings with the organization’s senior team to share our findings and generate new research and business planning ideas.

Soon after we completed our research, Community Servings closed their first deal: a contract for meals service with a school in Boston. I was happy to learn of their success, and felt that TDC’s involvement in developing the venture concept helped Community Servings to understand how best to position themselves in the marketplace and negotiate a contract to launch their new meals venture. From what I’ve learned so far in my work with TDC, this is where nonprofit consultants can add the most value. We have the skills and capacity for research and analysis that nonprofits can use to make critical decisions regarding strategy and the advancement of their missions. Using the skills I learned at SOM, I’m looking forward to working with many more talented teams like the one at Community Servings in the future.

Click here for more information about Community Servings.

Click here for more information about TDC.