A guide to third sector trading - WCVA
A guide to third sector trading - WCVA
A guide to third sector trading - WCVA
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It’s an idea, but is it business? A <strong>guide</strong> <strong>to</strong> <strong>third</strong> sec<strong>to</strong>r <strong>trading</strong><br />
1: Getting<br />
started<br />
2: First steps 3: Business<br />
planning<br />
4: Legal and<br />
governance<br />
5: Funding<br />
and<br />
resourcing<br />
6: Financial<br />
controls<br />
7: Managing<br />
growth<br />
8: Management<br />
and<br />
governance<br />
9: Social<br />
enterprise<br />
10: Sources<br />
of support<br />
• spreading the burden: Third sec<strong>to</strong>r <strong>trading</strong> organisations<br />
usually succeed because they are flexible, not because they<br />
have businesses which make them rich or management systems<br />
which are brilliantly streamlined. When times are hard it may<br />
be <strong>to</strong> your advantage <strong>to</strong> try <strong>to</strong> meet wages costs or building<br />
overheads by diverting in<strong>to</strong> several different small-scale income<br />
generating activities. The more willing you are <strong>to</strong> improvise the<br />
better your chances of survival.<br />
Increasing your fundraising efforts:<br />
• Yes, seriously: It’s counter-intuitive of course <strong>to</strong> increase<br />
your fundraising <strong>to</strong> become less dependent on grants, and<br />
some people may say it’s wrong headed. But this is about<br />
sustainability, not viability, and grants may temporarily or even<br />
permanently have an important role <strong>to</strong> play provided you use<br />
them wisely. (And don’t be made <strong>to</strong> feel guilty about your<br />
‘serious business’ credentials: what conventional business turns<br />
down grant money when it’s available?)<br />
• What sort of grants? What you need is fewer ‘life-and-death’<br />
grants, without which you have <strong>to</strong> start making key staff<br />
redundant and dropping services. This is the hand-<strong>to</strong>-mouth<br />
way the <strong>third</strong> sec<strong>to</strong>r has always been forced <strong>to</strong> live, and a<br />
social enterprise approach offers something better. It could be<br />
imperative, while grants remain important <strong>to</strong> you, <strong>to</strong> aim <strong>to</strong>:<br />
− diversify fundraising in<strong>to</strong> raising a larger number of smaller<br />
grants which contribute <strong>to</strong> non-<strong>trading</strong> core costs, so you<br />
become less dependent on any single funder<br />
− stagger the funding periods <strong>to</strong> avoid the perennial crises<br />
when large grants come <strong>to</strong> an end<br />
− raise grants for activities <strong>to</strong> extend what you already do rather<br />
than <strong>to</strong> preserve your vulnerable projects<br />
− raise grants which encourage enterprise development, and<br />
give you breathing space while you turn existing or new<br />
initiatives in<strong>to</strong> <strong>trading</strong> businesses<br />
− secure grants for any useful projects which pay overheads <strong>to</strong><br />
help resource the management core of the organisation. (If<br />
you find this approach <strong>to</strong>o cynical, fair enough. But someone<br />
else will bag the grant if you don’t, and may not produce such<br />
good results. It’s part of running a business, and it wouldn’t be<br />
necessary if the <strong>third</strong> sec<strong>to</strong>r was resourced more rationally.)<br />
Last-ditch survival strategies: Gambling is not normally a good<br />
course for hard-pressed <strong>third</strong> sec<strong>to</strong>r enterprises. You will seldom<br />
get something for nothing. But what if you have been careful,<br />
have accumulated reserves, and are planning ahead well enough<br />
<strong>to</strong> see that the end of your organisation is nigh? When you really<br />
do have nothing left <strong>to</strong> lose you can always consider:<br />
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