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More Than Wheels
Business Plan
Increasing the Impact of a low income
transportation program
Terri Steingrebe, CEO
4/13/2012
More Than Wheels Business Plan
Table of Contents
A. Executive Summary…………………………………………………………………………………………………………… 4-5
B. Industry and Market Analysis…………………………………………………………………………………………… 6-9
Market Context and Need
Current and Projected Demand
Ecosystem Analysis
C. Strategy and Theory of Change……………………………………………………………………......................10-12
Description of Organization and Mission
Description of the Initiative being Scaled
Evidence of outcomes/impact to-date
Definition of Social Value Proposition
D. Scaling Plan…………………………………………………………………………………………………………………………13-19
Strategy
Target Customers and/or Beneficiaries
Distribution Plan
Competitive Advantage and Barriers to Entry
Core Program Elements and Success Factors (what’s needed to succeed)
Timetable, Milestones & Measurable Three-Year Performance Goal
12-month Operating Plan
Marketing Plan
Projected Social Impact
E. Evaluation and Knowledge Dissemination Plan…………………………………………………………………19-21
Plan for Assessing Outcomes/Impact
Plan for Communicating Impact of Scaling/Expansion Initiative
F. Organization…………………………………………………………………………………………………………………….21-23
Organization History
Organization Structure and Governance
Current Size and Reach
Management Team (including succession planning)
G. Infrastructure Requirements…………………………………………………………………………………………… 23-24
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More Than Wheels Business Plan
Investments in Infrastructure Required to Support Expansion
Other Capacity Building Needs
H. Financial Plan for the Scaling/Expansion Initiative……………………………………………………………….25-29
Capital Required to Finance Expansion, by Type of Support (e.g., grants, debt)
Fund Development Strategy - Description of Sustainable Economic Model and Timetable
Current Funders and Commitments
Projected Funding by Sources of Support (e.g., government, foundation, earned income)
Pro Forma Financial Projections for 3 Years including cash flow and cost per client
Revenue, including assumptions
Expenses (including fixed and variable costs)
I.
Risk Assessment and Contingency Plan……………………………………………………………………………….29-30
Appendices
A.
B.
C.
D.
E.
F.
G.
More Than Wheels Clients Savings assumptions
More Than Wheels 2011 Evaluation Summary – University of New Hampshire
New England Market Analysis
More Than Wheels – Ways to Work program comparison
Organization Chart
Senior Management Bios and Board of Directors listing
12 month operating plan
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More Than Wheels Business Plan
A. EXECUTIVE SUMMARY
Julie, a single mom with three kids, came to More Than Wheels (MTW) in 2008 in desperate need of a
car to get to her job as a clinical secretary. She had to walk more than 2 miles to get to a bus to take her
to one of her two jobs, while trying to juggle getting her children to and from school, activities and
daycare. Seven months later, after working with our
About More Than Wheels
counselors and repairing her credit she was able to
purchase a new Nissan Versa at an interest rate of 4.3%
Founded in the Upper Valley of NH in 2001, MTW
under the MTW purchase program and guarantees.
uses the enticement of a new, energy efficient car
as the catalyst to provide vulnerable populations -Julie returned to school to obtain her LPN, she has
front-line health and community workers, victims of
increased her income by more than 35%.
To date, More Than Wheels has helped more than
1600 families like Julie’s saving those families over
$19.5m in transportation costs and 270,000 metric
tons of CO2 emissions.1 MTW clients have
demonstrated financial responsibility with a loan
default rate of only 5% versus an average of 9-13%
for all subprime borrowers nationally.
intimate-partner violence, immigrants and refugees,
young adults, military families, single mothers, and
individuals in recovery, among others -- the skills
they need to improve their financial stability, as well
as their overall health and well-being.
More Than Wheels provides behavioral counseling
and credit repair guidance, conducts financial
literacy classes, provides car selection expertise, and
partially guarantees car loans at reasonable rates
with financial institution partners for consumers
who would not otherwise qualify for them.
MTW is the second largest LICO (Low Income Car
Ownership Program) in the U.S. We rank number
#1 for lowest default rates and long term
behavioral change and are the only program to offer a new car option. According to an
independent study conducted by the University of New Hampshire, MTW clients have increased
their savings activity by 66%, report a 31% increase in being able to pay their bills on time, and
are increasing their credit scores. Clients have increased their access to traditional banking and
credit services, while reporting reduced mental and physical health issues, greater access to
health care, and improved access to nutritious and affordable food.2
MARKETABILITY & SCALABILITY
Although MTW has experienced early success and public attention, we are only beginning to
address the market demand. The predatory car sales/lending industry (Buy Here Pay Here BHPH) is an $80bn U.S. annual market. MTW estimates that 4-8% BHPH clients are candidates
for the MTW program which is a $3-$5bn opportunity. At the regional level, in New England,
MTW estimates the demand at $25M a year which means we have only penetrated 8% of the
market. After 10 years of start-up growing pains and lessons learned, MTW has established
and tested a plan to capture the market. The strategy to scale is two pronged: 1) intelligent
partnering and 2) application of technology. Partnering includes both geographic and
1
2
MTW Client savings assumptions: See Appendix A
MTW Evaluation Study, University of New Hampshire: See Appendix B for Evaluation Summary
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More Than Wheels Business Plan
programmatic partners, industry focused employers, and local government - building a multilevel network that will be sustainable for the long term. Partnering increases reach, while
mitigating expenses. The second leg to the strategy is using technology to improve access to
services and dramatically decrease direct program costs. Specifically, we are deploying distance
learning (Skype video calls, Web ex meetings) with mobile technology (mobile apps, texting,
image capture) and social media (inter-client communication, word of mouth viral marketing)
to change the paradigm of service delivery. The smart phone is a key enabler to this strategy.
EXPANSION READINESS
More Than Wheels is at a crossroads. The foundation has been built, and we are ready to scale
services across New England, as well as learn how this approach can be replicated and produce
widespread social impact nationally. More Than Wheels has a well developed understanding
of its client “funnel” which is a key factor to forecasting overall growth. By leveraging this well
understood client model with geographic expansion into Massachusetts, partnering with other
non profits and an increased leverage of earned media, MTW drove a 75% increase in inquiries
in 2011.
MTW has a deep database of operational data going back 6 years and a thorough
understanding of both the expense and income side of the business. Through the partnering
and technology adoption strategy, MTW is projecting significant growth while reducing the cost
per client served by over 40%. Correspondingly, by adopting several new revenue streams,
MTW is working towards the goal of making itself breakeven by 2020.
More Than Wheels, led by Terri Steingrebe an experienced commercial and non-profit
executive and an expanded and growing Board of Directors has a strong foundation to build on
including staff, business processes and systems, metrics, and strong partners. The organization
has specifically chosen a pace of growth that will allow for continued learning and modifications
over the next three years.
GO FORWARD
More Than Wheels seeks to raise $3.3M over the next three years, of which $1M has already been
committed to:


Educate 2800 individuals in personal financial management
Provide 1,400 immediate family members with the benefits of reliable affordable transportation
by partially guaranteeing 780 new loans


Emitting 140,000 less tons of CO2 into the environment
Saving these families >$7M in transportation costs – including 1.3M gallons of gas
Join us in realizing our vision!
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More Than Wheels Business Plan
B.
INDUSTRY AND MARKET ANALYSIS
NEED AND CONTEXT
In order to attain self-sufficiency, stabilize their finances, and move
up the economic ladder, low to moderate income consumers must
be able to connect to good jobs and meet family obligations. A car
is often a necessity. Lack of access to a car creates serious
difficulties for parents juggling work, medical appointments and
physical exercise. Transportation of children to school and after
school activities as well as child and elder parent care is a basic
necessity. Lower prices and a healthier selection of groceries are
often located in areas requiring personal transportation. Cars make
commuting at night safer, and people less vulnerable to
emergencies. Low to moderate income individuals who often have
no bank accounts and poor credit are taken advantage of when
purchasing a car. A Brookings Institution report concludes that
“Given the strong connection between cars and employment
outcomes, auto ownership programs may be one of the most
promising options and one worthy of expansion”3 Out of
desperation consumers in this income category turn to “buy-here,
pay-here” (BHPH) used car dealers, who do not require credit
checks, a good credit history, or a minimum credit score. BHPH’s
charge greater than market value prices, high interest rates, and
require large down payments. In addition to the onerous financial
burden, these used cars break down more frequently, often
requiring expensive repair. They consume larger amounts of
gasoline and release more carbon emissions. It is not unusual for
low to moderate income households to have used car loan
obligations outstanding even after their cars have broken down and
can no longer function as transportation.
“I had to save every penny for gas
because gas got me to work and paid
for the roof over our heads,” says
Trahan. Gas took precedence over
food — which meant the family ate
peanut butter and jelly or macaroni
and cheese. In the summer of 2008
high gas prices meant her son didn’t do
football and soccer at the local high
school. Worse, financial pressures
caused by the car lead her to take risks
she shouldn’t have. Trahan dropped
her auto insurance — which is
something you can do in New
Hampshire. Fortunately she didn’t
have an accident. Less successful was
her decision to cut back on her asthma
medicine necessitating two trips to the
emergency room”
Tammy Trahan – More Than Wheels
client
AUGUST 11, 2011, NY YORK
TIMES
On the Road, and Out of the
Red
By LISA MARGONELLI
3
Evelyn Blumenberg and Margy Walken, :The long journey to work: a federal transportation policy for working
families, Center for Urban and Metropolitan Policy, Brookings Institute July 2003 p.2
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More Than Wheels Business Plan
Figure 1: Buy Here Pay Here Statistics
4
There are more than 33,000 BHPH dealers across the country, financing over 2.4M cars, for
over $80B each year.5 62% of BHPH financing is for consumers categorized as deep subprime
with credit scores <550. This lack of reliable cars at decent financing terms for low to moderate
income households leaves them no option other than to purchase expensive, unreliable cars
again and again, contributing to a downward spiral of poverty. While transportation alone can’t
reduce poverty, it serves a critical role by removing a significant barrier to success. Reliable and
affordable transportation contributes to poverty reduction by lowering cost to live, enhancing
income opportunities, and enhancing health and well being.
In the past decade, community and regional banks have merged into national financial
institutions, and the banking sector has become increasingly dependent on credit scores and
automated underwriting systems. The system helps families with good scores access affordable
financing and gives them continued opportunities to access affordable credit and build wealth.
The financially excluded, however, are nearly always obliged to use high-cost, unreported
products, and have few opportunities to build a score and break the cycle. 7.7% of households
are unbanked, and 17.9% of households are under banked representing more than 60M adults6
nearly 20% of low income households (7M households) do not currently even have a bank
account. In recent years, increased social awareness of the many unfair and unethical business
practices of the for-profit car market has led to the creation and growth of a nonprofit car
market. The National Economic Development and Law Center’s Low-Income Car Ownership
(LICO) Clearinghouse has identified 150 LICO Programs. Cars obtained through these programs
still make up less than 1% of the overall US car market. There is a need to develop the
expertise of these programs to bring viable alternatives to the marketplace.
4
Wheels of Fortune, a three part series by Ken Bensinger, Los Angeles Times October 30, 2011
5 Wheels of Fortune, a three part series by Ken Bensinger, Los Angeles Times October 30, 2011
6 FDIC National Survey of Unbanked and Under banked Households December 2009
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More Than Wheels Business Plan
CURRENT & PROJECTED DEMAND: THE NEW ENGLAND MARKET
More Than Wheels has operated in New Hampshire for ten
years and in Greater Boston for two years. In New
Hampshire’s five markets, the annual number of program
inquiries from households with incomes ranging from
$10,000 to $50,000 varies from 1.8% - 2.6% annually, with
the average being 2.4%. The total New England market can
generate at least 20,000 inquiries annually. (See Appendix C.
for full set of assumptions)
NEW ENGLAND SCALING LOOKS LIKE:
$25M in low interest auto loans for low to
moderate income families – partially
guaranteed by More Than Wheels annually
Benefiting more than 3600 family members
Barriers to market entry are primarily More Than Wheels
resource dependent. Market success across New Hampshire
and two years of urban experience in Greater Boston have
provided enough proof points to believe a conservative 12.5% market penetration is not only possible but probable
given the appropriate investment and time for development.
annually
Saving $18M on total cost of car
ownership over the length of the
loan, including saving more than
550,000 gallons of gas annually
ECO SYSTEM ANALYSIS Figure 2: ECO System Diagram
Environmental Conditions
Political and Administrative Structures: CRA, IDA's, Consumer Protection Agency
Economics and Markets: Used car & Buy Here Pay Here market; LICO Market
Geography and Infrastructure: New England
Culture & Social Fabric: Green movement; Myths and bias about public transportation
Resource Providers:
Financial
* Banks & Credit Unions
* Venture Philanthropy
* Foundations
* Individuals
* Car Dealers
Human
* Quality of Staff
Knowledge
* Behavior Change
* Personal Finance
Networking
* Financial Literacy instructors
Technological
*Video/Internet "meetings"
* Mobile Technology
*intersection technology &
behavior change
Competition
Friendly: Good New Garage,
Ways to Work
Unfriendly: Buy Here Pay Here
Buystanders:
* Large Consumer
Lending Banks
* CDFI's
Customers:
* low-moderate income
consumers
* people with poor credit
Beneficiaries:
* Lenders (CRA)
* Employers (more
reliable employees)
* Government (less
public assistance)
Client Selection
Behavioral Coaching
Credit Repair
Loan Guarantees
Complementary Organizations/Allies
* Boston Fed
* Media Outlets
* Political Leaders
* State and Local Government (CAP
agencies)
* Employers & Social Service Agencies
* Unions
* Bankruptcy Lawyers
Opponents/Problem
Makers
* Agressive subprime lenders
*BHPH Dealers
Impact: Greater economic stability, self-sufficiency, and health and well being for low to moderate
income individuals with poor credit through the catalyst of a reliable and affordable car
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More Than Wheels Business Plan
More Than Wheels is operating in a complex environment. This environment requires communication
to customers, beneficiaries, complementary organizations and resource providers about the practices of
predatory lending practices prevalent today. This market is growing at a rate far greater than the rest of
the auto industry, and we expect this growth to continue. The most significant competitor to MTW is
the Buy Here Pay Here auto industry. The industry communicates to potential customers in a way that is
attention grabbing, and portrays the solution to reliable and affordable transportation as a quick and
easy process. With the highest profit margin in the industry, print, radio, internet, and TV advertising is
readily available for consumers that tout the ease of financing individuals with poor credit for affordable
car payments. There is a lack of transparency about the quality of the vehicle, the cost of repairs, and
the high interest rates over the life of the loan to consumers. There are more than 150 Low Income Car
Programs across the country. Most of these are very small, primarily giving away old vehicles for short
term use among the lowest income population. Nationally Ways to Work is the largest Low Income Car
program in the country, but they have only a small presence today in New England. More Than Wheels
and Ways to Work have shared program knowledge with each other, and explored an option of joining
forces in early 2011.7
Within the More Than Wheels eco system are three types of service delivery partners:
(1) Programmatic Partners (i.e. UTEC (United Teen Equality Center), Year Up), where the More Than
Wheels program is embedded into successful at risk youth workforce development programs.
(2) Geographic Partners (Worcester Community Action Council (Central Massachusetts), The
Opportunity Alliance (Greater Portland Maine). These partners provide in kind facility space,
resources, and computers for clients to connect with More Than Wheels specialists. These
partners are large employers who offer a variety of social services and they provide access to
More Than Wheels services to their employees, clients, and the community.
(3) Referral Partners (i.e. Dana Farber, Partners in Health, Whittier Street Health Center, East
Boston Health Center, Dartmouth Hitchcock Medical Center, City of Boston.) These partners
offer More Than Wheels services to employees through benefit fairs, newsletters, brochures,
posters, and EAP programs.
Sitting on the sidelines today are the largest consumer banks, and CDFI’s (Community Development
Finance Institutions). The banks have such large automated lending systems that they have been unable
at a practical level to offer lending services. The CDFI’s in New England are focusing their efforts on
small business and housing rather than smaller dollar consumer lending.
More Than Wheels depends on partnerships for client acquisition, lending, cars, and the delivery of
financial training. The beneficiaries other than the direct clients include employers who gain a more
reliable and productive workforce and government who may spend less on public assistance and will
collect increased taxes as clients become financially stronger members of the community.
7
Appendix D: Ways to Work and More Than Wheels program comparison
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More Than Wheels Business Plan
C. STRATEGY AND THEORY OF CHANGE
ORGANIZATION & MISSION
More Than Wheels addresses the economic issues of income opportunity and unemployment
through transportation solutions. Important to this transformation is a philosophy that good
financial decision making and good health require personal responsibility. MTW services stress
the importance of changing personal behaviors whether they are related to economic well
being or healthy living. The mission of MTW is to change the financial behavior of struggling
individuals and families where transportation will make a long lasting impact to their overall
economic self-sufficiency and contribute to improved health and well being and community
sustainability.
More Than Wheels is built upon the theory that changing personal financial decision making,
with the incentive of a reliable and affordable vehicle, leads to long term positive economic and
health and well being benefits.
DESCRIPTION OF INITIATIVE BEING SCALED
More Than Wheels couples the need for reliable transportation with a set of transformative
services designed to produce long term family stability and self-sufficiency. Using behavior
change techniques, and providing financial education, credit repair services, and “practice”
making an on time car loan payment, More Than Wheels works with low to moderate income
individuals and families to obtain a new or slightly used but certified car through a set of car
dealer and bank and credit union partners. More Than Wheels helps clients to select a car that
fits into their budget and will have value after the loan is repaid, ending a cycle of poor
financial decisions made even worse by poor car choices. MTW partially guarantees its loans –
based on program confidence and history of client success. More Than Wheels provides
ongoing support and advocacy for the life of the loan (generally 66 months), monitors credit
scores annually, and provides additional counseling or education as needed to achieve long
term success.
EVIDENCE OF OUTCOMES TO DATE
Personal financial management
 55% increase in pre-post financial education quiz scores
 88% of all subprime and deep subprime borrowers making on time car payments
 5% loan defaults as compared to 9-13% total subprime default rates, dollar default rate
< 2%
 5.5% increase in credit score (year 1 first cohort group being measured)
 75% clients with no or minimal (less than 3 incidents and all resolved) activity on their
credit report (year 1 first cohort group being measured)
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More Than Wheels Business Plan
 31% increase in on time bill paying (93.5% of graduates paying their bills on time)
 Clients more than doubled their saving activity (15.2% to 34.8%)
 81% clients comfortable doing business with a bank or credit union
Health and Well Being
 Average days of poor physical and mental health measured by days where poor health impacted
the ability to do normal activities, declined in graduated clients (3.85 days to 2.28 days -physical
health – a 41% decline), (6.71 to 3.33 days – mental health – a 50% decline)8
 Using a comparison group less graduates reported issues with transportation for accessing
health care services, and less postponement of services due to transportation issues
DEFINITION OF SOCIAL VALUE PROPOSITION
Figure 3: More Than Wheels Theory of Change Diagram
Low to moderate income
consumers with damaged credit
have limited options when it comes
to purchasing a reliable and
affordable car and must make
choices that often have negative
impacts on their lives
Use the car buying process as a
catalyst for lasting economic
improvments to a persons ecnomic
stability, self- sufficiency and
improved health and well being
Target low to moderate income
consumers with damaged credit and
where reliable and affordable
transportation will increase economic
opportunity:
* Accept them into the program
based on clear criteria
* Provide financial education in a way
that supports personal financial
management behavior changes
* provide 1-1 coaching and
counseling for credit repair & to
support behavior changes
* provide "practice" at making an on
time loan payment
* offer access to a low interest car
loan
* provide car selection and purchase
guidance
* provide on-going support and
advocacy for the life of the loan
Use a multi-level network , and a
robust technology based solution
to offer unique and not readily
available value added services that
are complementary to other social
interventions and make those
interventions stronger
*Save low to moderate income
consumers with poorcredit an
average of $10,000 over the life of
their loan
* Provide an entry for those who are
un or under banked into mainstream
financial institutions
* Provide a personal financial
education program with the tools and
templates necessary to achieve
greater control over household
finances
* Achieve greater than sub prime
credit scores
* Achieve long term change in
personal financial management
*Improve mental and physical stress
realted health issues
* Provide greater access to health care
services
Given (1) the education and tools to empower financial management changes, (2) performing
the work to repair all credit issues which results in greater confidence and self-respect, (3)
practicing these new decisions with encouragement, support and positive reinforcement, and
(4) accessing a low interest car loan on a new or certified used car - low to moderate income
consumers with poor credit scores will see long term economic and health benefits. The
8
More Than Wheels Evaluation Study see Appendix B
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More Than Wheels Business Plan
intervention results in a reliable borrower, thus allowing financial institutions to provide loans
to a set of the population that have previously been disregarded on credit score alone.
More Than Wheels drives:
Changes in awareness: Predatory lending, cost of poor transportation choices
Changes in attitude: From feelings of lack of control, overwhelmed by money problems, and
experiencing high levels of stress to gaining self-respect and making choices that facilitate a sense of
financial freedom
Changes in Knowledge & skills: Improved money management tactics including family budgeting,
making good choices based on needs vs. wants, practicing on time installment loan payments,
learning appropriate ways to use credit
Changes in Behaviors: Saving, on time bill paying, on time car loan payments, use of mainstream
financial institutions that lower financial fees and provide insured savings
All leading to Improvements in Family Financial Stability
D. SCALING PLAN
STRATEGY
More Than Wheels has a proven set of services, and promising outcomes. The scaling strategy
is to imbed these services in local agency programs and employer benefits programs, delivering
the services through a distance consulting model by using the internet and video technology,
and leveraging resources of partners to provide in kind support locally.
More Than Wheels is both a stand-alone program that builds consumer self sufficiency as well
as a service delivery system that can be integrated, actually embedded, into existing nonprofit
organizations already serving vulnerable populations. These nonprofits focused on asset
building, education, and health and social service delivery typically do not have a strategy to
address serious transportation problems, problems that can actually derail their clients and
their own employees from achieving self sufficiency and health and well-being. To enhance
these nonprofit programs, leverage existing philanthropic investment, and reduce the overall
cost of the service, More Than Wheels provides a joint program solution to address client and
employee need for reliable transportation. In collaboration with the “host” nonprofit, More
Than Wheels delivers its services using internet/video technology. More Than Wheels
customizes its services to fit the local nonprofit culture, integrating the service into existing
nonprofit programs, and broadening access to our services resulting in the serving a greater
number of people in the community.
These partnerships are a multi-level network:
1. Programmatic partnerships where services are directly embedded into at-risk youth and
workforce development programs and primary care and mental and behavioral health
services (e.g. pilots with United Teen Equality Center in Lowell; Year Up in Boston).
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More Than Wheels Business Plan
2. Geographic partnerships coordinated with organizations that provide multiple services
in a specific geographic area (e.g. Service delivery partnerships with Worcester
Community Action Counsel in central Massachusetts; The Opportunity Alliance serving
Greater Portland, Maine).
3. Referral partnerships with employer and social service agencies’ (e.g. Dana Farber, East
Boston Neighborhood Health Center, Whittier Street Health Center, City of Boston,
Community Teamwork/Lowell, Partners in Health, Roxbury Resource Center).
The enhanced use of technology is critical to the scaling strategy. Technology improvements
will be made over the next three years facilitated by a capacity building grant of $385,000
awarded April 6, 2012 from the Richard and Susan Smith Family Foundation. There are three
key elements of this capacity building:



Increased access to MTW services
Interactive, modularized financial education opportunities for clients to practice new
financial decision making skills and expanding positive reinforcement through a client
portal, and mobile application
Staff Productivity – providing extensive documentation requirements on the client
portal and connecting that documentation automatically into the current Quick base
back end web based client management system
More Than Wheels is using Skype and Web ex to meet with clients remotely, allowing greater
access for clients. This has directly impacted productivity by being able to serve clients in
various cities with a skilled workforce centrally located in New Hampshire and Boston. This will
be expanded upon by a greater use of mobile technology. More than half of our clients today
have smart phones. This trend is increasing. A study by PEW research has shown that today
40% of 18-29 year olds have smart phones, and Hispanic and African American adoption is
increasing with smart phones becoming an individuals’ only access to the internet.9 More Than
Wheels will develop a client portal to expand our ability to effectively service this population,
including the use of texting, and the creation of a More Than Wheels application for use on
smart phones and tablets. This strategy will allow MTW to reduce its cost of servicing clients by
40% over the next four years.
TARGET CUSTOMERS AND BENEFICIARIES
More Than Wheels targets individuals who are currently employed or who show great promise
of employment if they have a car and generally have incomes that fall within HUD low income
guidelines.10 The target market has poor credit scores, debt caused primarily by divorce,
medical illness or prior job loss, and strong need for a reliable car that fits into a limited budget.
The need for the car generally comes from one of two areas, (1) needs related to employment
including searching a wider geographic area, turning a one income household into a two
9
PEW Internet and American Life Project Aaron Smith March 1 2012
HUD low income guidelines are published annual by the government and are different by state and size of family
and used for section 8 housing and other state and federal low income programs
10
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More Than Wheels Business Plan
income household, or accessing education and training that will improve job prospects and (2)
doing everyday tasks that most people take for granted such as accessing child care, being able
to schedule and go to medical appointments, taking care of infirmed and elderly parents, being
able to shop outside of the neighborhood for groceries in the most economical manner
possible, and other everyday tasks.
In addition to the direct client beneficiaries of the program, employer partners indicate that
reduction in worry and stress related to transportation issues, being able to get to work on
time, and being able to take advantage of training opportunities for career growth are benefits
for both the employee and the employer.
DISTRIBUTION PLAN
More Than Wheels will accesses the target market through an indirect distribution strategy.
The development of a network of employer, programmatic, and referral partners is the primary
method of accessing clients. More Than Wheels also engages through local and state
government providing awareness of the program, earned media and social media which is
described more fully in the marketing plan.
COMPETITIVE ADVANTAGE & BARRIER TO ENTRY
The most significant barrier to entry of this market are Buy Here Pay Here car dealers and their
highly profitable model that allows for significant advertising and ease in servicing subprime
customers for car loans without consumers having to do the kind of substantive work that is
required in the More Than Wheels program. This ease of doing business comes at a cost to the
consumer of between $8,000 and $13,000 in increased cost of ownership over the life of a
loan.11 More Than Wheels has a track record of success both in client results, and in developing
partnerships with car dealers, banks and credit unions to obtain car pricing and interest rates
not generally available to this population. No other low income car program has established
these partnerships and has the ability to offer to consumers with subprime credit scores who
meet program requirements accessibility to an interest rate currently between 4.3% and 5.5%.
CORE PROGRAM ELEMENT & SUCCESS FACTORS
Originally scaling through a branch model was envisioned for More Than Wheels.12 After
working with this model for several years, it was determined that the model was too costly to
scale effectively. Through a meeting facilitated by Robert Wood Johnson Foundation, More
Than Wheels worked to understand the Ways to Work loose affiliate model to see if there was
an opportunity to join forces. While a decision was made not to be acquired by Ways to Work,
More Than Wheels was able to determine that there were four critical components of its own
client success: (1) the screening process, (2) the behavior change intervention, (3) content,
quality, and hands on approach of the financial education component, and (4) car selection.
11
See Appendix A: More Than Wheels client savings chart vs. BHPH car market
More Than Wheels first business plan published as part of Business Planning for Enduring Social Impact, by
Andrew Wolk and Kelley Kreitz, 2008 Published by Root Cause
12
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More Than Wheels Business Plan
Rather than scaling branch offices, or contemplating how to ensure the quality of the above
critical components in a “franchisee” model, More Than Wheels began to envision how to scale
the approach that was generating the positive client outcomes.
Screening
More Than Wheels completed an analysis of 750 clients to better understand what the
characteristics of successful clients are. Based on this analysis, the screening process was
modified to best evaluate the characteristics of WAMI. Successful clients have been shown to
have a willingness to make changes (open to making different financial decisions on their
household budget), Have the ability to read, write and do simple math or have access to
someone to help them (they must repair all credit items themselves..with our guidance),
motivation, that extends past obtaining a car (educational aspirations, making their children
proud, obtaining better employment), and initiative to do the work necessary to attend
financial education classes, repair their credit, and prove they can make an on time car
payment
Behavior Change Intervention
Our client facing employees have a unique blend of skills: being able to read people at an
emotional level, give praise and encouragement, tough love when warranted, and a shoulder to
cry on from time to time. The skills and support for people who will almost always “fall off the
wagon” are critical in attaining an intervention that will provide long term success. The
“practice” of having to personally repair all negative credit items (with support and tools from
More Than Wheels), and proving through a monthly saving requirement that an on time car
payment can be made enhances a clients new mode of decision making. Principals of successful
behavior change such as frequent reinforcement of positive behaviors and patience with
multiple relapses into former behaviors are important elements of this intervention.
Financial Education
Rather than espousing theories or high level advice, More Than Wheels financial education
program is practical and hands on, requiring completion of homework each week. It is a
combination of lectures, templates and tools, and interactive participation with others in a
similar situation. Clients gain confidence and understand that they are “not alone”. Each client
must track their income and expenses daily for five weeks. New ways to go about decision
making and understanding choices is stressed. In the end only our clients can control how they
manage their money. The program brings the entire family into the classroom – with an
understanding that it takes the entire family to make a commitment to change the way they
make financial decisions. In addition to the specific financial skills gained, clients gain a renewed
sense of self-confidence that has taken a beating from the many collections calls and loss of
financial freedom caused by poor credit.
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More Than Wheels Business Plan
Car Selection
Selecting the right car is critical to long term success. The car selected must be reliable (new or
certified used), and the car payment must include a warranty as part of the car payment. The
quality of the car and incorporating as many costs as possible into the car payment is critical for
success. In the early stages of changing their financial decision making clients need the
reliability of one payment that includes as many of the transportation costs as possible. The
problem with using a $4,000 to $6,000 used car is that the repair costs must be saved for which
often can derail all of the work and expense of the behavior change intervention. Clients
receive follow-up support for the life of the loan, including tracking credit score, and credit
activity and offering additional counseling as needed. If a clients’ financial situation has
changed we assist them to get out of their car loan without damaging the work they have done
on their credit. Having the right car makes all of this possible.
TIMETABLE, MIELSTONES & PERFORMANCE GOALS
Through the support of philanthropy More Than Wheels has developed the infrastructure that
can now be scaled including phone and internet screening, client management systems and
tools, and metrics reporting. A web based client management tool is in place that allows the
organization to monitor in real time the four essential items of client work (1) documentation
(2) credit repair (3) establishment of positive payment history (practice of making on time
monthly payments (4) financial education course. We track on a client by client basis and for
the organization in total which clients are on track and which are off track and require
additional support or training.
The scaling plan calls for rolling out services using the partner network and technology initiative
across New England at a pace that will allow for continuous learning and modifications, drive a
lower cost per client served and implement additional earned revenue streams. The execution
of the expansion plan will be influenced by the best opportunities for quality partnerships and
not necessarily driven by choice of the next geography. However the financials, the timetable
and milestones have been developed by geography so as to aid in quantifying the costs and
investments required.
Key Goals:
 Expand services through geographic and programmatic partners, industry focused employers,
and local government building a multi-level network that will sustain a level of client volumes
with a less direct More Than Wheels effort in established geographies
 Combine behavioral change techniques and technology to create a unique client experience that
improves client success rates and can be scaled effectively
 Drive down the cost per client served over the next three years by at least 40%
 Build a stronger and more diverse Board of Directors
 Establish an individual giving program and an additional earned revenue streams
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More Than Wheels Business Plan
Milestones and Timeline:




Expand services in 2012 to Portland Maine, Brockton and Worcester Massachusetts
Expand services in 2013 to Lowell and Lawrence Massachusetts, and Lewiston-Auburn Maine
Expand services in 2014 to Springfield Massachusetts, Bangor and Augusta Maine
With a newly expanded Board of Directors develop an individual giving strategy for
implementation in 2013
 Explore the potential of new earned revenue streams – including licensing the financial
education program, and obtaining a level of fees for client car insurance support and implement
one or more of these opportunities by the end of 2013
 Implement a client portal that codifies behavioral change techniques, and provides internal
productivity for staff starting in 2012
TWELVE MONTH OPERATING PLAN13
MARKETING PLAN
The More Than Wheels scaling plan depends on an “indirect” model for client acquisition and
service, through partners. MTW has created “Marketing in a Box” to support partners
consisting of:





More Than Wheels brochure
More Than Wheels posters
Email messaging for rolling the program out to employees
Client focused articles for employee newsletters
More Than Wheels logo link for use on intranet sites, to connect with the More Than
Wheels website
 Opportunities to host webinar sessions (virtual lunch brown bag sessions) for potential
clients to hear directly from More Than Wheels
 Template for joint awareness activities between partner and More Than Wheels
More Than Wheels works directly with partners to develop a marketing plan, which consists of
awareness within the community of agencies, employers, and local government.
In addition More Than Wheels uses:
 More Than Wheels face book page www.facebook/morethanwheels.org and Twitter @
morethanwheels
 Earned Media to communicate client success stories and stories posted on its website
http://www.morethanwheels.org/success-stories
13
Appendix G 12 month operating plan
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More Than Wheels Business Plan
 Presentations to local high visibility agencies as part of creating a geographic referral
network
 Partnerships with Bank and Credit Unions to offer declined car loan applicants an
introduction to More Than Wheels
 Media partnerships with banks and credit unions to create awareness
 Encouragement of graduates to refer others with a small referral fee
 Participation in employer benefits fairs, and events
The marketing effort also includes advocating for our client base in public policy issues of
importance. This includes input to government around the issues of predatory lending,
consumer finance regulations, and federal policy around individual development programs. It
also involves raising awareness around the impact a low credit score can have on employment,
insurance rates, and other aspects of an individuals’ life.
Targeting and selecting partners for expansion and managing those relationships are key to the
success of the marketing plan. Partners wishing to be the primary geographic outlet to obtain
More Than Wheels services will have the following characteristics:
 A history and track record of success with the population being served
 A leader in the local community, with a large and strong network within the geography
 Sees transportation as a significant issue for its employees, clients, and the community
in general and wishes to provide a transportation option
 Sufficient size to provide pro bono private facility space for More Than Wheels clients to
have internet based video meetings in private, the resources to coordinate meeting
scheduled with More Than Wheels and provide potential clients with technology
assistance as needed, and with computers available that include video.
 A desire to work with More Than Wheels to introduce the services to the general
community
 A willingness to do joint fundraising with More Than Wheels to provide necessary client
service capacity
 Long term commitment to the collaboration, and joint achievement of outstanding long
term outcomes
PROJECTED SOCIAL IMPACT
By the end of the three year plan, More Than Wheels envisions:
1. More Than Wheels services are imbedded in successful social programs and workforce
development efforts across New England and provided as employee benefits by area
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More Than Wheels Business Plan
employers in the health care, retail and hospitality, state & local government, education,
and non-profit industries.
2. Key economic stability and health and well being improvements are achieved by the
population served.
3. Costs per client served are reduced, and new revenue streams in place, so that further
expansion can be funded by local start up investments only
4. Public awareness of predatory lending practices and the role that reliable and affordable
transportation can play in achieving greater economic self-sufficiency is communicated
through social marketing programs, and advocacy efforts. Clear messages abound on
how individual success can be achieved by making different decisions in personal
financial management
Specifically we will:
 Educate 2800 individuals in personal financial management
 Provide 1,400 immediate family members with the benefits of reliable affordable transportation
by partially guaranteeing 780 new loans
 Emitting 140,000 less tons of CO2 into the environment
 Saving these families >$7M in transportation costs – including 1.3M gallons of gas
VISION FOR INFLUENCING SECTOR OR SYSTEM CHANGE
Changes facilitated by More Than Wheels and other Low Income Car programs will provide
wide-spread alternatives for low to moderate income families to obtain low interest car loans
that lead to greater economic self-sufficiency and better health and well being. Programs such
as Ways to Work and More Than Wheels gain the traction for serving greater numbers of
individuals, and continue to work together in the sector. Long term, providing quantitative
results to financial institutions who under the Community Reinvestment Act (CRA), are
encouraged to make community investments in a set of services such as those delivered by
More Than Wheels. Those investments can turn what is viewed as a high risk low income
consumer, into a reasonable risk bringing more consumers into traditional banking and
strengthening the local community.
E. EVALUATION & KNOWLEDGE DESEMINATION PLAN
PLAN FOR ASSESSING OUTCOME/IMPACT
More Than Wheels has developed a set of clear indicators that its program is impactful. Those
indicators have been segregated into short, intermediate, and long term outcomes.
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More Than Wheels Business Plan
Short Term Outcomes (While participants are going through the program)
 Improve knowledge of personal financial skills while going through the program (12
hours of financial education, and pre/post education test scores)
 All negative items on an individuals’ credit report are addressed using templates, skills
and coaching provided by program specialists (consumer loan applications documents
the repair and addressing of all negative credit items - % loan applications approved by
bank and credit union lending partners)
 Car loan payment is no more than 80% of disposable income after all other expenses for
housing, living expenses, and debt are paid confirmed by reviewing (individual spending
plan (budget))
 At least 6 months of practice is achieved for making an on time monthly installment
payment (documentation of savings receipts)
Intermediate Term Outcomes (during the length of the loan)
 Car payments are made on time (external reporting from bank and credit union
partners)
 Improvements in health and well being as demonstrated by externally administered
surveys
 Continuous improvements annually in credit scores (internal reporting and
communication to clients)
Long Term Outcomes (after loan is paid off)
 Default rates significantly less than national subprime borrowers
 Credit scores exceed 650 (subprime level)
Through an automated client management system, externally supplied reporting, and internal
credit score and credit report reviews reporting has been put in place to measure all of these
outcomes. In addition total cost of ownership and carbon emission reduction data are analyzed
annually based on average client cars when entering and leaving the program.
While More Than Wheels has many instances of antidotal examples of the wide and deep
benefits that our clients experience, we wanted to take the next step in our evolution, and
engaged a third party evaluator to help us better understand how to measure those changes.
After an initial research study in 2007, a three year study was completed in 2011.
The result of this evaluation is included in Appendix B. While it is not a randomized trial, the
experience of conducting an independent third party evaluation has moved the organization
forward. We are currently working with OMG Associates in Philadelphia and evaluation expert
Dr. Brenda Henry from the Robert Wood Johnson Foundation, to determine our next steps in
both internal and external studies.
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More Than Wheels Business Plan
PLANS FOR COMMUNICATING IMPACT OF SCALING INITIATIVES
More Than Wheels communicates to a set of interested parties annually on program and client
outcomes, as well as learning from scaling activities. Also shared are the changes made based
on that learning. Those constituencies include:




Financial supporters at all levels (foundations, corporations and individuals)
Board of Directors
Bank and Credit Union partners
Referral partners through conversations and our newsletter that is distributed three
times a year
In addition More Than Wheels has shared with legislators and other organization followers
through our web site and social media the quantitative and qualitative results of our work. We
believe that communication is important in raising awareness around predatory lending and
consumer lending regulations.
F. ORGANIZATION
HISTORY
More Than Wheels was founded in 2001, spending the first five years developing its core
program in the Upper Valley region of New Hampshire. Between 2006 and 2007 the
organization attempted its first program expansion from Lebanon NH, to Keene and
Portsmouth NH. These experiments while good learning experiences, resulted in a greater
appreciation for needing a formal business plan. After winning awards from the Manhattan
Institute for Social Entrepreneurship and the Civic Ventures Purpose Prize for social innovation,
the organization contracted with Andrew Wolk, President of Root Cause in Cambridge
Massachusetts, to assist the organization prepare its first business plan. With this business plan,
the organization attracted greater investment, and was able to hire its first CEO, Terri
Steingrebe an experienced business executive to lead the organization in its plans to expand
services. With funding from a national foundation, The Robert Wood Johnson Foundation, and
a regional foundation Jane’s Trust, More Than Wheels was able to develop a management
team, and the infrastructure necessary to scale its work. In 2010 venture philanthropy
organization, Strategic Grant Partners invested $1.4M in the organization to take its program to
scale in Massachusetts starting in Boston. The organization is now serving all of New
Hampshire, and Greater Boston and has begun to expand operations across Eastern
Massachusetts and Portland Maine beginning in spring 2012. In order to continue to respond
to market demand and increase impact, More Than Wheels will require an additional
investment. As part of its initial scaling efforts the organization has refined its mission,
developed a web based client management system, a set of reporting dashboards for program
and client outcomes, an advanced screening process, and third party evaluation studies. It is
well understood what is required to develop a new geography, including a well understood and
documented client “funnel” starting from client inquiries. This funnel is shown as part of the
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More Than Wheels Business Plan
three year financials. This knowledge is critical in being able to determine the pace at which
scaling is practical.
ORGANIZAITONAL STRUCTURE AND GOVERNANCE
More Than Wheels is organized into three distinct areas: (1) client acquisition and partner
development which includes marketing and intake, (2) client services which includes all work
from the time of a clients’ enrollment in the program to obtaining a car loan (3) management
and administrative services including Finance, Development, and Evaluations. 14
More Than Wheels is governed by a six-member board and board constituted committees for
finance and audit, governance, and fundraising.15 The Board of Directors meets quarterly,
setting policy, monitoring the organizations financials and management dashboards, and
providing expertise in the areas of general non-profit management, finance, and growth
strategies. 100% of Board members contributed financially to the organization. Board
members include expertise in venture/start-up organizations, large non-profit management,
finance, and sales & marketing. The Board has recently completed a Board of Directors
Handbook as it enters into a plan to add expertise in the areas of banking, PR, fundraising, and
evaluations over the next year. The Board of Director hires the CEO and reviews her
performance annually. They approve an annual operating budget, and they delegate the hiring
and termination of personnel, and daily operations to the CEO. The CEO oversees Partner
Development, Client Services, Finance, Evaluations, and Fundraising.
MANAGEMENT TEAM
More Than Wheels is led by CEO Terri Steingrebe who was hired to assume the leadership role
from More Than Wheels founder Robert Chambers in 2008. She has held a number of
executive leadership roles at Digital Equipment Corporation and Avid Technology, as well as
executive roles as COO and CFO in two start-up organizations. Her most recent role was as VP
of Worldwide Finance and Sales Operations for Avid Technology with P&L responsibility for a
$220M sales and services organization in North America, Europe and Asia. She is a graduate of
Penn State University, and serves on the Board of Directors of the New London Playhouse, the
nations’ oldest summer stock theater.
Debra Miller (VP Business Development) was hired in 2010. Her background is in consumer
banking and community relations. Her most recent position was Senior Vice President of
Corporate Affairs for Citizens Bank. Debby is a graduate of Winston-Salem State University and
the Executive Leadership Program I, Harvard Business School, Edinburgh, Scotland. She was
formerly the Board Chair at Whittier Street Health Center in Boston, and is currently on the
Winston-Salem State University, Board of Trustees.
14
15
Appendix E: More Than Wheels organization chart
Appendix F: More Than Wheels Management Team Bios & Board of Directors listing
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More Than Wheels Business Plan
David Ryan and Mary Burnett (Directors of Client Services) are responsible for clients from the
time they enroll until the time they graduate from the program. Mary Burnett started at More
Than Wheels in 2002, as its first employee. Mary has been in the auto industry since graduating
from Boston College. She has held a number of executive management positions as general
manager at several New England car dealerships and was president of Brattleboro Ford and
Subaru as the organizations principal owner. David Ryan joined More Than Wheels in 2011 and
has 20 years of experience in financial services. He holds a BA from Wesleyan University in
Economic and Politics, and a Masters in Economics from London School of Economics. He held
management positions in credit and risk at HSBC in Hong Kong and was Branch Manager for
HSBC in London. More recently he was responsible for HSBC’s global e-business out of New
York.
G. INFRASTRUCTURE REQUIREMENTS
INVESTMENTS REQUIRED TO SUPPORT EXPANSION
Through previous investments, More Than Wheels has been able to build infrastructure in the
following areas:





Web based client management system
Program and outcome reporting and dashboards
Marketing Collateral
Website
Lending and Car dealer contracts
There are three additional areas of support that are required:
 Consulting support around the addition of new earned revenue streams
 Building an individual giving program for the organization that consists of both financial
support and car donations
 Technology improvements (recently awarded a three year capacity building grant for
$385,000)
OTHER CAPACITY BUILDING NEEDS
As additional markets are added, resources will need to be increased in two specific areas:
(1) Client acquisition and Intake, (2) Client delivery services. New revenue streams as they
are planned for and executed against will likely require resources and spending in advance
of revenues. It is still to early to have a full understanding of the financials related to these
potential new revenue streams, but the business plan will be modified as the organization
goes along and learns more about the impact of these or other items that will change over
the next several years.
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More Than Wheels Business Plan
FINANCIAL PLAN
CAPITAL REQUIRED TO FINANCE EXPANSION
The cost of running the More Than Wheels program with expansion across New England for
2012-2014 is more than $4.6M. 30% of this total ($1.4M) will be obtained from current earned
revenue, and we are looking to raise an additional $3.3M from grants, with $1M of this having
been committed to date.
FUND DEVELOPMENT STRATEGY & DESCRIPTION OF SUSTAINABLE ECONOMIC MODEL & TIMETABLE
By implementing its partner and technology strategy, More Than Wheels will bring down its
cost per client served from more than $9,000 per client in 2011 to just over $3,000 per client by
the end of 2014. The organizations goal is to achieve breakeven on a steady state of volume,
and fund additional growth from local sources where services are being added. In order to
achieve this goal, we will need to close an annual deficit of about $1M a year.
To reduce a dependency on philanthropy the organization over the next three years will:
 develop a sustainable fund raising strategy targeting individual giving that includes car
donations and provides $350,000 a year in support
 Add new revenue streams that will provide $250,000 of revenue a year starting in 2014,
and will grow over time. There are two current areas under investigation which include
a financial education product/service, and a car insurance service.
Capacity building costs for these items have been included in the financials while no
incremental revenues have been added in. We expect that over this period the individual giving
program and new revenue streams will begin to replace foundation support, but we expect that
to achieve the full $1M required it will take an additional 5 years of additional but declining
corporate and foundation support. We anticipate that National Foundations interested in the
scaling aspect of this plan for its applicability in other areas of the country, Local Foundations
and United Way organizations in local areas receiving services, and Corporate Sponsors will
provide the funding over the next three years, with individual giving gearing up to replace a
portion of the foundation support over time and new revenue streams which will allow to the
organization to achieve its goal of being break even by 2020.
CURRENT FUNDERS AND COMMITMENTS
More Than Wheels has two large committed funders, Robert Wood Johnson Foundation, and
Strategic Grant Partners in Boston. The organization also receives consistent funding from Bank
of America, Citizens Bank, Sovereign Bank, Peoples Bank, and TD Bank. There has been
consistent funding from the New Hampshire Charitable Foundation, and the New Hampshire
Community Development Finance Authority. There are also smaller foundations that continue
to support our work including Amelia Peabody Foundation, Bean Foundation, Byrne
Foundation, Tillotson Foundation, and others. The United Ways across the More Than Wheels
service areas support the program, as do several other corporate sponsors including Public
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More Than Wheels Business Plan
Service of New Hampshire, and the Seacoast Women’s Giving Circle. More Than Wheels in
April of this year was awarded a highly competitive three year technology capacity building
grant for $385,000 from the Richard and Susan Smith Family Foundation in Boston.
Figure 4: 2011 vs. 2014 sources of funding
2011
Client
Program Fees
10%
Client
Temporary
Transportatio
n Fees
12%
Partner Fees
(loan
origination
fee)
2%
Supplemental
Fees(warranty
* , insurance,
curriculum)
2%
Sale of
Donated Cars
0%
From
Philanthropy
74%
2014 Plan
Client
Temporary
Transportation
Fees Partner Fees
10%
(loan
origination
Client
fee)
Program
4%
Fees
19%
From
Philanthropy
60%
Supplemental
Fees(warranty
* , insurance,
curriculum)
6%
Sale of
Donated Cars
1%
FINANCIAL PLANS AND ASSUMPTIONS
Financial schedule 1:
Market penetration rate assumptions by market over the next three years are shown below.
Data for NH and Boston for 2011 represent actual rates. The More Than Wheels financial model
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More Than Wheels Business Plan
is driven off of call volume, so the assumptions around call volume are critical to the overall
financials
Financial Schedule 1: Current and Projected Expansion Plans for 2012-2014
Call Volume projections
Total number of
households from
$10,000 to $50,000 in
Number of Households
income
2011 Call Volume
Current Coverage Areas:
Concord
Manchester
Portsmouth
Lebanon
Keene
Calls outside of these metropolitan areas
Total Calls NH
Boston
Total Calls
2012 Expansion Areas
Nashua
Worcester
Brockton
Portland Maine
Total Calls 2012
2013 Expansion Areas
Lawrence
Lowell-Chelmsford
Lewiston-Auburn
Total Calls 2013
2014 Expansion Areas
Springfield
Augusta
Bangor
Total Calls 2014
16,846
30,045
12,381
14,174
11,419
2011 % market
penetration
401
532
431
351
292
235
2,242
1,100
3,342
84,865
391,525
36,995
87,786
33,093
66,039
2012
% market
penetration
2.4%
1.8%
3.5%
2.5%
2.6%
2.4%
2.0%
2.5%
2.5%
2.5%
2.6%
0.3%
0.4%
0.2%
0.2%
0.2%
0.2%
2013
call plan
2014
% market
penetration
404
601
310
354
285
125
2,080
1,566
3,646
2.4%
2.0%
2.5%
2.5%
2.5%
74
132
50
99
4,000
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
24,341 N/A
36,706 N/A
23,196 N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
121,642 N/A
18,199 N/A
27,571 N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
% market
penetration
call plan
404
601
310
354
285
125
2,080
1,958
4,037
2.4%
2.0%
2.5%
2.5%
2.5%
0.4%
0.4%
0.4%
0.4%
148
351
132
264
4,933
0.5%
0.7%
0.5%
0.9%
185
615
165
594
5,988
0.2%
0.2%
0.2%
49
55
35
5,071
0.4%
0.4%
0.4%
97
147
93
6,325
0.2%
0.2%
0.2%
243
27
41
6,637
0.5%
N/A
N/A
N/A
call plan
N/A
N/A
N/A
These assumptions are conservative, showing a slow penetration of each new market.
Historical rates in New Hampshire markets represent fully developed markets over a period for
five or more years of awareness building.
Page 26
0.6%
404
601
310
354
285
125
2,080
2,349
4,429
More Than Wheels Business Plan
Summary Financials
More Than Wheels "Funnel" Assumptions
Total calls received
% calls qualified and scheduled for an initial meeting
# qualified prospects scheduled for an initial meeting
% initial meetings completed
# initial meetings completed
% prospects enrolled
Enrolled clients
% enrolled clients receiving a loan in calendar year
# loans
# immediate family members benefiting from loan
# individuals completing financial education
Client car ownership cost savings over life of loan
Gallons of gasoline saved over life of loan
2011 actual
$
Earned Revenue from client fees (enrollment fee, program fee, loan
origination fee, warranty fee)
Fees for temporary transportation program
Revenue from sale of donated cars
Revenue from Philanthropy
$
$
$
$
Total Revenue
$
Program Expenses:
Fixed Costs - Intake and Service delivery
Variable Costs - Intake and service delivery
Fixed Costs client acquisition/marketing and partner development
Variable costs client acquisisition/marketing and partner development
Fixed Management costs
Variable Management Costs
Capacity building costs (one time)
Total Cost
Net cost (earned revenue less total expense) per client loan
% annual reduction in per client cost
Beginning Cash
Revenue
Expenses
Ending Cash
% required from philanthropy committed 1/1/2012
% cost covered by fees
$
$
$
$
$
$
$
$
$
$
$
$
2012 Budget
2013 Plan
2014 Plan
3356
4000
5071
6637
41%
41%
41%
41%
1376
1640
2079
2721
56%
56%
56%
56%
771
918
1164
1524
50%
55%
60%
65%
385
505
699
991
32%
36%
36%
36%
123
180
248
352
221
323
447
634
501
657
908
1288
1,105,770 $ 1,614,336 $2,232,626 $ 3,165,602
216,480
316,043
437,088
619,740
177,596
153,367
6,980
965,000
$
215,484
$
144,000
$
10,000
$ 1,000,000
$ 298,015
$ 150,000
$ 15,000
$1,100,000
$ 422,550
$ 155,000
$
20,000
$ 1,200,000
1,302,943 $ 1,369,484 $1,563,015 $ 1,797,550
56,280
795,904
5,540
183,795
14,290
394,514
$
57,000 $ 58,000
$
644,149 $ 780,149
$
5,500 $
5,500
$
176,916 $ 216,916
$
15,000 $ 15,000
$
356,913 $ 360,000
$
125,000 $ 100,000
1,450,323 $ 1,380,478 $1,535,565
9,044 $
5,630 $
4,319
38%
23%
$
59,000
$ 912,149
$
5,500
$ 241,916
$
15,000
$ 450,000
$
75,000
$ 1,758,565
$
3,297
24%
180,000
1,302,943
1,450,323
32,620
$
49,076
$ 1,797,550
$ 1,758,565
$
88,061
100%
23%
$
32,620 $ 21,626
$ 1,369,484 $1,563,015
$ 1,380,478 $1,535,565
$
21,626 $ 49,076
90%
26%
27%
29%
0%
33%
SECTION 1: MORE THAN WHEELS FUNNEL
More Than Wheels has six full years of data that begins with call volume, and steps through the
intake and screening process eventually resulting in a number of loans to be guaranteed. The
assumptions used for the financials do not assume any significant improvements to the funnel –
although we are now seeing improvements related to changes made over the past four months.
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More Than Wheels Business Plan
The most significant change is that we are now enrolling clients at a rate of 70% rather than the
50 – 65% shown above.
SECTION 2: REVENUE ASSUMPTIONS
More Than Wheels has a number of different revenue streams today. These streams include:
(1) Client paid enrollment fee ($68)
(2) Client paid service fees (financed into the car loan) ($895)
(3) Bank or Credit Union loan origination fee ($200 per loan paid to More Than Wheels
from lending partner)
(4) Warranty Fee – All cars come with a full warranty provided by More Than Wheels. We
offer a 60% discount from standard retail pricing for clients, and earn $300 for each
warranty sold
(5) Client paid fees for using More Than Wheels temporary transportation services. Clients
who need a car while going through the program pay to More Than Wheels a fee of
$250 a month for access to a reliable vehicle. More Than Wheels maintains a fleet of 70
cars, which are provided to clients for the fee. Clients provide ongoing maintenance and
insurance on the car as well as pay for registration. More Than Wheels pays for more
extensive maintenance on these vehicles as well as administration costs for the fleet.
This program is managed at a breakeven. The cars are provided by private car donors,
or funds to purchase these cars have been provided by grants.
(6) More Than Wheels may sell donated cars to funds operations. Today, and for the
purpose of this business plan these revenues are minimal – however increasing this
source of revenue is part of the strategy for increasing individual donations to the
organization which will be implemented over the next several years. The value of what
this can provide for revenues has been assumed at a very conservative rate because of a
current lack of experience in this revenue source.
(7) Revenue from Philanthropy represents the funds raised from individuals, corporations,
and foundations for support of the program
(8) These financials do not reflect the new revenue sources expected to be developed over
the next three years. There was not an ability to make educated and reliable estimates
for these sources at this time, and so they were omitted from the financials for reasons
of insuring that the financials represents a conservative current view of funds required.
EXPENSE ASSUMPTIONS
More Than Wheels has very limited fixed expenses. They include office rent, client
management systems costs, and phone and internet costs, and annual audit costs. Most
expenses are variable and are for resources to: (1) develop client acquisition partnerships,
market to clients, and screen clients, (2) provide consultative services and loan application and
car selection services to clients, and (3) provide executive management, finance, fund
development, and evaluation services for the organization.
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More Than Wheels Business Plan
Client intake services have been set up to use both phone (a toll free number) and web based
program application. These services screen, schedule, and follow-up with clients until they are
either lost or have enrolled in the program. These services can be scaled to meet demand with
the addition of additional trained intake specialists with much change in the cost structure
other than incremental resource costs.
In expansion mode, client acquisition services are more extensive than we believe they will be
over time in a steady state mode. The work to develop partnerships, cultivate employer
partnerships, and referral partners, and manage earned media opportunities will decline over
time, however not in the time period of this plan. We expect that these costs can decrease by
20-25% in a steady state model.
RISK ASSESSMENT AND CONTINGENCY PLAN
More Than Wheels has examined a number of areas for potential risk, assessed the current
situation and developed contingency plans where warranted. The assessment included looking
at the following areas:







Market sizing and growth plans
Assumed productivity gains
Technology requirements
Staffing needs
Raising Capital
Governance
Management Team
There are four areas that have the highest degree of risk:




Assumed productivity gains
Staffing
Raising Capital
Governance
The productivity gains to reduce the cost per client of services, has been projected to be
significant in this plan. To achieve these ambitious goals there are four areas that must be
addressed: (1) improvements in technology (2) different staffing model for service delivery (3)
outsourcing of car selection to car dealer partners, and (4) improved client pipeline reporting.
To address the technology side the organization has been awarded a 3 year capacity planning
grant for $385,000 to develop a client portal that will codify the behavior change work and
combine our organizational knowledge of behavior change with the “science” of behavior
change of clients. The technology grant will also assist in deepening the use of web based
documentation that will automatically update back end client management systems.
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More Than Wheels Business Plan
In January More Than Wheels re-organized its direct service delivery personnel. New
resources with greater skills in behavior change were added, and some resources were let go
because the skill sets were not sufficient to meet expectations. In the last three months there
is quantifiable evidence that this change has improved productivity, with the percentage of
client being enrolled from those qualified rising from 50% to 75%, and time to complete the
program showing evidence of being reduced by 20%. In January the selection of cars has been
outsourced to car dealer partners, creating greater internal productivity. A new set of client
reports that are monitored by the client services team weekly have started to show the teams
ability to forecast the timing of loans improving. In addition, the use of interns to provide
support to the service team has enabled them to gain additional productivity.
In order to mitigate risks in finding new staff with the right skill sets and cultural fit, job
descriptions have been documented, including both hard and soft skills. An interview
technique has been developed using the assistance of a pro bono psychologist which will now
be used in interviewing potential new hires.
The Board of Directors has completed a review to identify the skills required for governance
and organizational support to assist the organization get to the next level of success. To this
end a Board Handbook for new members has been developed, and a committee has been
formed that will focus efforts with the CEO to recruit the needed Board Expansion. Alumni
networks at Tuck Business School have been tapped for locating potential new Board members
and the Board expects to expand to 8-10 members by the end of 2012.
Not surprisingly raising capital to support the scaling initiative and developing the capacity to
become more financially self-sustaining is probably the largest risk for the organization.
Without additional commitments, scaling would need to be pulled back. Regardless of capital
raised, More Than Wheels will need to execute on developing an individual giving program and
additional earned revenue streams or face a long term problems of solvency.
This business plan competition has been entered into for two reasons. It drives the completion
of a solid business plan developed by the CEO and management team, rather than by outside
consultants, that can be used to make a case to potential investors. Secondarily the opportunity
to become a finalist in the competition and present our plan to a group of potential investors is
one that More Than Wheels relishes. We have a proven model for client success, a strong and
committed management team, a Board of Directors that is transforming itself, and the
knowledge, skills, and commitment to bring this program to scale for greater impact.
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