A guide to third sector trading - WCVA

It’s an idea, but is it business? A guide to third sector trading
1: Getting
started
2: First steps 3: Business
planning
4: Legal and
governance
5: Funding
and
resourcing
6: Financial
controls
7: Managing
growth
8: Management
and
governance
9: Social
enterprise
10: Sources
of support
• start up capital
• looking ahead to further investment later.
Other investment and resource issues:
Further information can be found in later sections:
• Pursuing sustainability: see Section 5.2
• Funding subsidiary trading companies: see section 5.3
• Using property assets to develop the business: see section 7.3
• Funding for development and expansion: see section 7.2
• Raising money from shares and bonds: see section 5.4
• Taking advantage of tax breaks: see sections 7.5 and 7.6
‘Sustainability’ or ‘growth’
What do you want your trading to achieve? The way you go
about funding third sector trading activities depends on what
you want to achieve. This may sound obvious, but there may be
fundamental differences between:
• ‘sustainability objectives’ – where the primary objective is to
improve the prospects for survival of an existing organisation, and
• ‘growth or development objectives’ – where the main
objective is growth, in financial turnover, the number or range
of services and activities, numbers of jobs or some other aspect
of the business.
Why you need to be clear about your goals: This distinction is
rarely made in discussions about third sector trading because it
is attractive to say we want both sustainability and growth. But
there are good practical reasons why new businesses should be
more focused.
• Practitioners and support agencies are far from united on
the fundamental issues of ‘viability’, ‘sustainability’ and what
trading ventures should be trying to achieve. So you need to
watch out for inconsistent advice, and be sure that your goals
are not at odds with those who are advising you.
• Ambitions for long-term expansion can be extremely important.
But if you are new to third sector trading it is usually safer to
have a plan for developing your business step by step rather
than in giant leaps. Making an existing organisation more
sustainable is a good place to start, particularly in an uncertain
economic climate.
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