A guide to third sector trading - WCVA

More documents

Recommendations

Info

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 • retaining profits for future investment will also incur corporation tax which normally can’t be eliminated through Gift Aid • most social enterprises (despite the optimism of some directors, and the illusions of others) do not make profits to re-invest in the first few years. Funding expansion out of current trade: A common practice for many businesses is to buy the new and replacement equipment they need on the strength of their latest big order. Meeting the customer’s need might only be possible if you buy an otherwise unaffordable piece of software for a design business or new projection equipment to accommodate a lucrative conference in your community centre. Making the investment now probably means that you will make a loss on the current order. But in future you will be able to charge more, provide a better service or work more efficiently. You will soon be bidding for work which was previously beyond your reach. Contracts with capital funding: In a similar vein, enterprises can occasionally secure contracts to provide services to public bodies where the cost of necessary investment is covered by the fee they charge. This would be in addition to what is needed to pay salaries and operating costs, and might be used to pay for essential equipment and the improvement in buildings. These improvements – a new vehicle, kitchen facilities, or building improvements perhaps – should then be made available for other users either now or when the contract ends. (If the opportunity arises you should think hard about getting the best possible longterm benefit from the improvements you invest in. It is astonishing how little this happens and how much flashy equipment and high quality accommodation becomes redundant when contracts are over.) Grants linked to loans: Funding bodies too rarely provide joint grant and loan arrangements, although this can be hugely valuable for starting to wean enterprises off the grant dependency. The Wales Council for Voluntary Action and the former Welsh Development Agency have both run such schemes in Wales. Unsecured loans: Unsecured or ‘soft’ loans are often offered by organisations which have affinity for social enterprise activity and which may support the third sector. A number of organisations help with the purchase of building assets, and so provide an alternative to conventional mortgages. Sound business plans are vital. Secured loans: Secured loans and conventional mortgages may also be useful for organisations acquiring and developing property assets. Sound business plans are vital. 178
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 Bonds and shares: Bond and share issues are popular with cooperative organisations, and offer opportunities for raising finance which are often neglected by community organisations. More information is provided in section 5.4. Appeals and voluntary effort: While business loans are clearly a grown-up way to support expansion which can earn credibility with customers and credit with future funders, old-fashioned fundraising may still work. The capacity of volunteers to raise money by doing extraordinary things or just making a big fuss is legendary. It can be appallingly hard work, and takes great commitment. But the effort can sometimes save and acquire treasured buildings, and bring threatened icons of our heritage, culture and the environment back into productive economic use. If you take this route you still have to make sure that you have realistic business plans, achievable income generation targets to sustain your project, and energy left to achieve them. But that’s no reason to be snooty about the power of volunteering to change the world. Sources of loan finance Sources for ‘third sector’ projects: Various loan providers offer different levels of finance, each with their own specific criteria and rates of repayment, to third sector groups. Funding schemes come and go, and their objectives and terms and conditions are constantly changing, but may be worth checking out. Providers will usually expect a good financial return on investments, but they also recognise the importance of social, ethical and environmental concerns. In order to ensure the material in this publication does not date too quickly, the providers and schemes referred to above are listed in information sheet 7.5 Loans, [change to Enterprise?] part of the Finding and getting money series available for download from WCVA’s website or any CVC website. These information sheets are regularly updated to ensure information and contacts are up to date. 179
Page 1 and 2:
It’s an idea, but is it business?
Page 3 and 4:
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
Page 93 and 94:
Page 95 and 96:
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130: It’s an idea, but is it business?
Page 179: It’s an idea, but is it business?
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
Page 237 and 238:
Page 239 and 240:
Page 241 and 242:
Page 243 and 244:
Page 245 and 246:
Page 247 and 248:
Page 249 and 250:
Page 251 and 252:
Page 253 and 254:
Page 255 and 256:
Page 257 and 258:
Page 259 and 260:
Page 261:
show all

A guide to third sector trading - WCVA

Create successful ePaper yourself

Delete template?

Save as template?