Monthly Expense / Profit Splits - Complex Examples

See also: Finances, Startup Equity Splits, and Business Model
Here are some more Complex examples of how Habitats for Happiness may choose to generate monthly profits using DomeGaia workshops:

Example #4: Profitability Groups


Suppose there are 10 members and 4 interns/volunteers in the Center who decide to build a Community Dome one month & run a workshop to get it done.

The Project team decides to run the Workshop as its own Profitability Group, meaning that: The members of the Project team Agree that all profit / losses created by the Project will be kept within the team executing the project (which limits the scope of the Advice Process for financials to within the team). They also agree that the meal preparation will be part of the Project Group (not a separate subgroup) and that it is fair for tent camping fees to be payable directly to the Center.
Assuming:
  • Project costs of $2500 in materials
  • Two members lead the workshop and put in 100 hours each doing so
  • Two members cook for the workshop and put in 80 hours each doing so
  • One member provides general assistance for the workshop and puts in 120 hours doing so.
  • Two Volunteers assist with the workshop
  • The other 5 community members have other priorities and chillax in hammocks all month.
  • The project team agrees that leadership is valued at $50/hr, cooking is valued at $30/hr and ombudsmanship is valued at $25/hr
  • 30 people attend the Workshop, paying $1,200 each in tuition (30% of which is retained by DomeGaia as Commission for clients).
  • Half of the Workshop Attendees also buy meal plans at $400 each & sign up for camping on the land @ $200 each.

Workshop's Income & Expenses

  

Income:

        

Host Workshop

30 people @ 70% of $1200

$25,200

Meal Plans

15 people @ $400 each

$6,000
     

Total Income:

$31,200

Expenses:

      

Materials

      

$2,500

Leadership

200 hours @ $50/hr

$10,000

Cooking

  

160 hours @ $30/hr

$4,800

Ombudsman

120 hours @ $25/hr

$3,000

Food expenses

    

$1,500
     

Total Expenses:

$21,800
     

Net Workshop Profit:

$9,400
The Project Team’s total income comes out to: $1200*70%*30 + ($400) * 15 = $31,200
Their total expenditures come out to: $50*100*2 leadership + $30*80*2 cooking + $25*120 assistance + $2500 (materials) + $1500 (food costs) = $21,800
The Project’s net profit comes out to: $21,200 - $21,800 = $9,400, which they split amongst the 5 members of the team for bonuses of $1,880 each. Note that if they had overrun their budget by paying themselves too much or having to put in more hours than expected, they might have had a loss that would be deducted from their final pay. This creates an intrinsic motive for Project Teams to estimate their probable Profitability as accurately as possible (without going over).
As for the Center, they not only got a nice new Community Building, they are received $200/person in camping fees, so their monthly bills went from:
$3,000 fixed monthly expenses - $200 camping fees*15 campers = $0… Nobody needs to make a Cash Contribution this month… they basically got to live there for free; their mortgage was paid for by Camping Fees associated with the workshop.
New Paradigm Center's Income & Expenses
Income:        
Camping Fees 15 people @ $200 each $3,000
      Total: $3,000
Expenses:      
Mortgage, taxes, insurance & other normal $3,000
      Total: $3,000
  Center's Net this Month: $0

Example #5 for Centers which do Meal-Sharing


Extending the possibilities even farther, another likely real-world scenario is:​
A particular Habitats for Happiness engages in Meal Sharing 5 times/week.  4 days/week a couple of members take turns cooking for the entire community (10 people + 4 volunteers). There’s a signup list for upcoming meals so they know how many people to cook for. On Sundays there is a big potluck that everyone is free to join.

The normal food costs for these 4 group meals is $140/week + 12 hours/week labor at $25/hr. 
The Center's normal monthly expenses are therefore $3000 + ($140 +12*25)*52/12 = $4900 /month… except: Volunteers pay for their own room and board:  their meal cost / month is $135 each & their housing costs are estimated at $215/month ($350 total), which reduces the Center's net monthly expenses to $4900 - ($350)*4  = $3500 (or $350/month for each of the 10 members). Note that the fact that Volunteers and Community members have the same estimated monthly expenses implies that everyone's expenses are being calculated correctly.
New Paradigm Center's Monthly I&E
Income:        
Vollunteers' Room & Board $1,400
      Total Income: $1,400
Expenses:      
Mortgage, taxes, insurance, etc $3,000
Weekly Meal Sharing - food (@$140/week) $607
Weekly Meal Sharing - labor (12 hours/week @ $25/hr) $1,300
      Total Expenses: $4,907
Center's Normal Net Monthly Expenses: $3,507
Normal Dues/Month per Member:  $350
One month, the 10 members decide to build a Community Dome. The Project is run as its own Profitability Group, meaning that: The members of the Project Agree that all profit / losses created by the Project will be kept within the team executing the project (which limits the scope of the Advice Process for financials to within the team).

They & the Center also agree that Meal Fees will be paid directly to the Center, and a separate group (of the ordinary cooks + an assistant) organizes to handle the cooking.  Everyone also agrees that it is fair for tent camping fees to be payable directly to the Center.

Assuming:​
  • Project costs of $2500 in materials
  • Two members lead the workshop and put in 100 hours each doing so
  • One member provides general assistance for the workshop and puts in 120 hours doing so.
  • Two Volunteers also assist with the workshop
  • The project team agrees that leadership is valued at $50/hr, and ombudsmanship is valued at $25/hr
  • 30 people attend the Workshop, paying $1,200 each in tuition (30% of which goes back to DomeGaia).
The Project Team’s total income comes out to: $1200*70%*30 = $25,200
Their total expenses come out to: $50*100*2 + $25*120 + $2500 (materials) = $15,500
The Project’s net profit comes out to: $25,200 - $15,500 = $9,700, which they split amongst the 3 members of the team for bonuses of $3,233 each.
​Again: if they had overrun their budget by paying themselves too much or having to put in more hours than expected, they might have had a loss that would be deducted from their pay. This creates an intrinsic motive for Project Teams to estimate their probable Profitability as accurately as possible (without going over).

Workshop's Income & Expenses

  

Income:

        

Host Workshop

30 people @ 70% of $1200

$25,200
     

Total Income:

$25,200

Expenses:

      

Materials

      

$2,500

Leadership

200 hours @ $50/hr

$10,000

Ombudsman

120 hours @ $25/hr

$3,000
     

Total Expenses:

$15,500
     

Net Workshop Profit:

$9,700
What about meals? Well, several of the people who usually cook formed their own Project Team to cover the meals. Using the Advice Process, they decided that the meal team SHOULD NOT be its own Profitability Group because members of the Center might want to partake in meals too during the workshop.
  • The Meal Team decided that their time cooking was worth $30 /hr. On average, half the community (plus all the volunteers) signed up for the meals that they were going to cook (in addition to the 50% of workshop members who signed up).
  • They put in 100 hours cooking for the workshop + community, with $2200 in food costs.
  • Their total expenses came to $30*100 + $2200 = $5200
  • Their total income was $400*15 workshop attendees meal fees + $135*(10/30)*4 volunteer's meal fees =  $6,180
  • Their net profit was: $6180 – $5200 = $980, which went back to the community (since the meal team chose not to set itself up as its own Profitability Group).
Meal Team's Income & Expenses  
Income:        
Meal Plans (15 @ $400 each)   $6,000
Vollunteer's Meal Fees (pro-rated) $180
Total Income: $6,180
       
Expenses:      
Labor (100 hours @ $30/hr)   $3,000
Food Costs     $2,200
Total Expenses: $5,200
Meal Team's Net Profit: $980
As for the Center, it not only got a nice new Community Building, it also received $200/person in camping fees, free meals for 10 days, and a little profit on the meal plan, so their monthly net that month changes from each member having to pay $350 to live there to receiving a Profit-sharing check for $110 instead. 
As a group, Habitats for Happiness are free to do whatever they want with their profits. The community members might alternatively decide to establish cash reserves, project funding pools, and/or buy back land purchase investment capital with any such profits.
New Paradigm Center's Income this Month
Income:        
Camping Fees (15 @ $200 each) $3,000
Meal Plan Profit $980
Vollunteers' Room & Board $1,400
      Total Income: $5,380
Expenses:      
Mortgage, taxes, insurance, etc $3,000
Weekly Meal Sharing - food (@$140/week, prorated to 20 days) $404
Weekly Meal Sharing - labor (12 hours/week @ $25/hr, prorated) $867
      Total Expenses: $4,271
Center's Net Income this Month: $1,109

Summary

Note the checks & balances in play here:

Members of the Habitats for Happiness have the option to engage in any type of work that interests them so long as they are able to cover their Monthly Dues. They can hold jobs off the land or contribute labor on the land. They may even have home businesses (the establishment of which would invoke the Advice Process to ensure everyone's comfort).

Subject to each Center's specific choices & guidelines, groups within the community can form and set up as their own Profitability Groups, which may receive bonuses for coming in under budget, but are also committed to deducting losses from their pay if they go over budget… this drives internal checking of payscales and time accounting. There is therefore an incentive to run Projects as their own Profitability Group unless the team finds it likely that they will take a loss. In those cases, the entire Center is affected and must therefore approve / disapprove the project on the basis of whether the expected loss is worth the benefit to the Center. They are likely to invoke the power of group thought and creative problem solving to minimize the anticipated loss, or perhaps refuse the project if it seems not worth it…

If a situation arises where community members are long on time and short on cash, they have DomeGaia's support & the ability to access the DomeGaia business model of hosting workshops to convert their free time into substantial cash. DomeGaia supplies the clients in exchange for a 30% Commission, and intends to expand the types of workshops they offer to other earth-friendly topics according to the expertise brought by Members of the New Paradigm Centers.

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