A guide to third sector trading - WCVA

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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 Action Guide section New and small-scale trading organisations Community organisations generally Existing and prospective charities set up quality control system 8.1 3 3 3 appoint staff 8.3 3 3 3 try pilot trading or a small-scale start up 3.2 often advisable if appropriate if appropriate Manage business growth maintain community involvement 8.5 3 3 if appropriate involve users in governance if appropriate if appropriate if appropriate move from grants to loans 7.2 as necessary as necessary as necessary consider developing property assets 7.3 recommended recommended recommended keep business and charitable activities separate 6.2 as necessary essential for charities essential handle tensions between social & business activities 8.1 be ready to act be ready to act must be avoided plan leadership succession 8.4 recommended recommended recommended 16
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 2: First steps 2.1 Why start trading? This section untangles the many benefits of running trading activities so that groups can clarify what they are trying to achieve, and distinguishes some of the things which trading ventures can’t easily achieve. What trading organisations can’t do The need for a sense of proportion: Trading is not a panacea. Since the idea of social enterprise arrived on the political agenda, we have been confronted with the risks of hype and distorted visions of its potential benefits. There have been appalling misrepresentations of the potential of voluntary organisations to run businesses, and these always need to be refuted to protect the inexperienced from making damaging mistakes. Although there are always a few success stories, here are some of the things community and charity is usually not good at: • creating sustainable jobs in disadvantaged areas: Third sector trading rarely creates large numbers of sustainable jobs, especially in community-based groups in deprived areas. When lasting jobs are achieved they should be a cause for celebration, not just a routine tick on a monitoring report. This is because, as with conventional enterprise in disadvantaged areas, jobs come and go with grants and market conditions. • creating well-paid jobs: Work is often low paid, and this is exactly what we should expect when jobs are created in marginal activities and in places with limited economic opportunities. • replacing grant-funding jobs: Many conventional businesses have a tough time generating enough income to keep their own employees in jobs. The idea that modest voluntary organisations will be able to run businesses which make so much profit that they can divert cash to provide salaries for community and social projects is ambitious and unrealistic in the current climate. Yet this view is sometimes put forward as an argument for trading. For many voluntary organisations trading is always likely to be an additional income stream to their other activities. 17
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A guide to third sector trading - WCVA

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