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 />
− making direct contact with support agencies<br />
− making preliminary checks on financial institutions.<br />
• Now do the analysis. Weigh it all up by considering:<br />
− what is still confusing and incomprehensible, and what<br />
questions do you still need <strong>to</strong> answer?<br />
− what are the main practical options available <strong>to</strong> you? do you<br />
fully understand them?<br />
− what seem <strong>to</strong> be the most reliable sources of information?<br />
• Work with your advisors: You need the patience, attention,<br />
time and honesty of the people who are advising you. They are<br />
more likely <strong>to</strong> give you that if you have an open relationship,<br />
with mutual trust and respect. That means taking their advice<br />
seriously. If you ignore your advisors, they will probably ignore<br />
you in future. So if you don’t want <strong>to</strong> take their advice, explain<br />
why it won’t work.<br />
So where will investment funding come from?<br />
Considering the wider possibilities: Don’t let your horizons<br />
be restricted by a narrow choice between grants and loans.<br />
The following list is not exhaustive, but it gives a flavour of the<br />
wider possibilities:<br />
Grants: Grants don’t have <strong>to</strong> be bad for you if you are not going<br />
<strong>to</strong> be wholly dependent on them and if they help <strong>to</strong> release the<br />
potential of a dynamic and innovative enterprise. If you talk <strong>to</strong> the<br />
right funders you will find that they will understand what you are<br />
trying <strong>to</strong> do and want <strong>to</strong> help without getting in your way.<br />
Earned income: This is the way many businesses grow. Letting<br />
property, for instance, can generate significant income <strong>to</strong> reinvest<br />
in new <strong>trading</strong> activities if there are no loan repayments <strong>to</strong><br />
make and there is a market for the accommodation. Enterprises<br />
with a range of different sources of earned income (commercial<br />
contracts, fees and charges for services etc) may find themselves<br />
with surpluses provided they are not also struggling <strong>to</strong> fund an<br />
expensive core of managers and administra<strong>to</strong>rs. But there can be<br />
major problems:<br />
• using profits <strong>to</strong> fund an expansion can involve a lot of painful<br />
‘sweat equity’ in the form of long unpaid staff hours or<br />
voluntary activity<br />
• using the profits on an existing <strong>trading</strong> activity <strong>to</strong> fund the start<br />
of another business could undermine the long-term health of<br />
the venture which is producing the wealth: it’s obviously better<br />
if a successful enterprise invests in its own expansion<br />
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