STArTInG A LOCAL RADiO stAtiOn - Nai

Section 6: Financial managementThere is no single business model that works for all radio stations. Each model differs because of thecharacteristics of your community and the size of the local economy. Radio stations in Afghanistan areturning more often to mixed business models that promote sustainability. For example, a station that wascreated with the expectation that all of its income would come from sales of local advertising may findthat model does not meet all its needs. It could adopt a mixed model, generating income from donorcontributions and program sponsorships or Public Service Announcements, as well as advertising.What should a business model contain?A) Product of ServicennThe radio station’s mission statement (see Section 1 of this manual).The service that your station provides to the community is your product: It includes distributionof important news and cultural and social information, and community developmentor empowerment.B) Organization and Management StructurennThe ownership of the station (whether it’s a community station managed by an electedadvisory board or a commercial station owned by an individual or company).The station’s organizational chart (see Section 1 of this manual).C) Strategy and ImplementationnnDetails of partnerships with other local organizations and the value to the organizationsand the community from such cooperation. Partners might include donors, local communityorganizations, university faculties, and etc.The station’s skills capacity is a list of the skills necessary to continue the work of the station,including management, program production, financial, technical, research, outreach, andetc.D) Financial ManagementnnnnnThe cost of maintaining the station including capital cost and running cost.What are the main operating costs?How much money is needed to meet these costs?A list of income sources, the station’s income statement and cash flow statement.Balance Sheet — a statement of your station’s financial position or net worth at a particularpoint in time, usually the last day of the station’s financial year. The following equation summarizesthe balance sheet: Assets – Liabilities = Net Worth.68 STARTING A LOCAL RADIO STATION: A MANUAL FOR AFGHANISTAN