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
Planning and start up funding
Do you really need grants to get started? Some voluntary
organisations take the submissive view that they must have grant
help before they undertake anything new. This is not necessarily
the best approach for trading because:
• small scale pilot trading activities which test possibilities and
build expertise and confidence can be started inexpensively – a
café in a village hall can start with some second hand crockery,
a free course in food hygiene for a group of volunteers plus a
bottle of milk and a packet of teabags (and the whole point of
trading is that it pays for itself)
• a group which would rather write grant bids than roll up its
sleeves and have a go at earning some cash may not persuade
either potential funders or its own members that it will be able
to run a business.
Funding for business plans: If you are applying for grants for
feasibility studies and business planning your bids will usually
need to show that:
• the idea is potentially viable
• your organisation has the capacity to manage the research
process, whether you do this yourselves or employ a consultant
• even before the business plan is prepared, there is some
prospect that the project would not be prohibitively expensive
to launch and would gain necessary approvals
• there is a credible organisation to drive the project forward if it
proves to be feasible
• you are prepared to work in partnership with other interested
parties and to deliver results which fit with the existing
strategies of public bodies. (In many cases you need to be
consulting with and collaborating with others as early as
possible in the planning process.)
Unsurprisingly, it is much easier for existing charities and
community organisations than for newcomers to get funding at
this stage.
Launching the business: When you start a new trading activity,
large or small, you are likely to need finance, and perhaps other
help, to prepare for and equip the business and to meet initial
operating costs. It is particularly important that you distinguish
between these different costs in your fundraising (capital and
revenue grants are not usually interchangeable) and while
monitoring progress in the critical early days of trading. Here are
some of the costs you may incur:
110