Income-Generating Activities - Action Against Hunger

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Field handbook • Scientific and Technical Department <strong>Activities</strong> must not be promoted if their potential for income generation is not known. It is essential that the product or service is in demand and that the IGA can offer attractive prices that will also be able to cover their expenses and generate a profit for the beneficiaries. While designing the programme, different scenarios will be elaborated regarding the budget necessary for supporting the IGA. Distinct strategies for production and sales may exist based on the knowledge and interests of the population involved. The exercise of planning the economic operation of the IGA must be carried out by the beneficiaries, supported by training and consultation sessions directed towards the elaboration of business plans. Example 14: The contents of a business plan Brief General information regarding the group or individual planning to carry out the IGA: name, location, contact information Brief description of the activity in process or to be started: what is going to be produced, processed, or what service will be offered Marketing plan: Information about the market of the product or service Sales strategy: how sales are planned during the period for which the plan is presented, the activities can have seasonal or constant sales depending on the type of product or service. Production plan for the period in question (minimum one year or one productive cycle). Production volumes: how much will be produced and when. Existing capital and its current state: the assets necessary for production or for offering the service. Inputs: materials that will be consumed during the production process or the service. Labour: all the activities that have to be carried out in the production process must be considered. Brief Necessary structure for the management of the activity Brief Financial plan Prices and sales volumes: incomes Operational expenses Fixed costs Reinvestment Expected results Profit for the beneficiaries INCOME GENERATING ACTIVITIES: A KEY CONCEPT IN SUSTAINABLE FOOD SECURTIY 55
➔ The trainings and the business plan will be designed depending on the educational level and the capabilities of the people involved. When the population is illiterate and limited capacities, this exercise may be unsuitable. The training sessions regarding management must be carried out before the activity starts so that the basic concepts such as income, functioning costs, fixed costs, cost recovery on investments etc., are already familiar to the beneficiaries. An example of a business plan that follows these guidelines can be found in Appendix 13. II.V. Economic management of the activity The business plan is a working tool for the IGA, that once finished will become fundamental for the management of the activity and the evaluation of the economic results obtained. The accounting records and procedures will be sources of information through which to verify the progress of the IGA. This can be a complicated task for people who are not used to carrying it out. Simplification of the procedures, training sessions and support in the field will help to create the habit of keeping these kinds of records. Appendix 14 gives a brief example of a training guide for IGA management, including concepts and suggestions for accounting formats. III. RESPONSES TO DIFFERENT PROBLEMS The factors that limit the successful functioning of the IGA can be varied and the programmes will focus on distinct aspects depending on the nature of the problems faced. Some of the solutions that ACF has been putting into practice during the last few years will be mentioned below, these alternatives can be seen as intervention options that aim to respond to the question: what is the difficulty that impedes the population from generating sufficient incomes 17 III.I. Access to assets and inputs for production We can find situations in which the families or groups have stopped producing or do not generate enough incomes because they do not have the productive assets or the materials needed. In these situations it is necessary to understand why they do not have these materials, if this is the main limitation that they face for their activities, if it is a problem only in this moment in time or if it is a structural limitation, and if 17 Assuming that the activities are viable and economically suitable for the zone. 56 INCOME GENERATING ACTIVITIES: A KEY CONCEPT IN SUSTAINABLE FOOD SECURTIY
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