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Business Structure
Business Organization and Structure
Strategy: Umbrella organization
Where: ReSource, The ReBuilding Center, Habitat for Humanity of Metro Denver, ReNew Building Materials and Salvage, Restore Home Improvement Center (MA), Build it Green! NYC
Description: Of the 10 organizations researched, six have an “umbrella” organization that is responsible for their creation and existence. In these cases, the material reuse operations resulted from growth out of an organizational mission, for example:
- “Community enhancement” (Our United Villages/Rebuilding Center)
- “Support low income housing” (Habitat for Humanity/ReStore)
Umbrella organizations can allow their individual programs to focus on elements of the greater mission and enhance overall success. Some material reuse businesses that are elements of larger umbrella organizations have developed focused business strategies resembling a for-profit entity, their profits help support the umbrella organization’s other missions.
Pros:
- Shared business needs can reduce overhead costs (e.g., accounting, benefits, HR)
- An umbrella organization’s previously established community reputation enhances PR of the reuse business – customer, donor, industry recognition
Cons:
- Potential for disruptive competition for resources between programs
Practice: Use multiple facilities to promote rapid learning and knowledge exchange
Where: ReSource, Habitat for Humanity of Metro Denver, RE Store (WA)
Description: Multiple facilities inside the same organization can share ideas to speed innovation and increase operational efficiencies. Strategic trial-and-error is used to improve business operations in areas such as staffing, stocking, racking, product acquisition and deconstruction.
Pros:
- Rapid learning cycles
- Speeds development of innovative business solutions
- Promotes staff creativity
Cons:
- Potential for increased detrimental competition
Strategy: Create and leverage advisors with diverse skills
Where: The Reuse People, Restore Home Improvement Center (MA), ReNew Building Materials and Salvage
Description: Build a Board of Directors / Advisors that provides skills, knowledge and connections in the building material and related industries that are not present within core management staff.
Suggestion: Identify areas of need and use network to access key individuals to fill those holes. Examples include accountants, certified lumber graders, and contractors.
Pros:
- Increase knowledge and skill set
- Access additional resources
- Network
- Markets
Cons:
- Time and effort to create diversified board
- Persons with valuable skills may have difficulty providing adequate time to the organization
Strategy: Diversify business operations
Where: The Reuse People, RE-USE Consulting, The ReBuilding Center
Description: Build parallel businesses offerings, products and services, that complement each other and build on the organization’s core expertise in building material reuse. Mission-fulfilling operations can diversify the revenue stream and stabilize and strengthen the core operation’s finances and provide hedge against changes in the reuse industry marketplace, e.g., competition, real estate market, demographics.
Pros:
- Multiple revenue streams create flexibility for industry growth
- Mission advancement and promotion (e.g. landfill diversion)
Cons:
- Deviation from core competency requires investment and increases risk of financial instability
- May use up resources need by primary business
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