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
Achieving sustainability in practice: The best route to
sustainability in a third sector organisation is through increased
diversification of activities and improved flexibility in operations.
You might still achieve it by winning a single lucrative longrunning
contract, or stumbling on a sure-fire business idea that
will make your fortune. But few organisations are that clever or
lucky – and no one has time to wait and see.
• Sustainability: Sustainability is simply about being here next year
and in three and five years time; it is not only, or necessarily,
about running profitable businesses (no matter what sceptical
professional advisors, economic development officers and
statutory service providers may tell you). Profits help a lot, but
there are other ways to get there.
• Flexibility: Flexibility is what the third sector is almost always
good at (although it does sometimes get tied up in knots by
political correctness and impractical employment practices). The
ability to change quickly and take on challenges are precisely
the qualities that trading organisations need.
• Diversification: People working in industries in crisis like
farming and fishing are typically urged to find additional ways
to top up limited incomes, and it works for many of them.
− Diversification can also work extremely well for organisations
such as community regeneration charities which have varied
objectives and multiple projects, whether or not they are
already seriously involved in trading.
− Single-purpose and social charities (which serve the needs
of, say, pre-school children, elderly or disabled people)
have much less scope, but they can often still diversify the
type of facilities they offer, the particular target clients, the
geographical areas where they operate, and sometimes even
the range of organisations which award them contracts.
What has to change? Being flexible and diverse is not an easy route.
It probably involves changing what you do and how you do it, and
possibly changing the whole culture of your organisation (or at least
the trading parts of it) and working as best you can to change the
culture of those you work for so they will understand your needs.
Section 8.2 describes five key steps in managing this process overall:
• creating a stable core organisation
• fostering an enterprising culture
• dealing with the negative reactions to change
• securing support and working with partners
• setting targets and measuring progress.
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