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
Co-ordinated activities: Complex charities and voluntary
organisations, including social enterprises often offer a range
of different, unrelated services in combinations that would
boggle many traders in conventional business. This demands a
high degree of organisation, co-ordination and communication
between the different parts of the enterprise. Without this:
• economies of scale will be missed: work will be harder and
earn less income
• isolated staff may resist the introduction of social enterprise if they
feel isolated or left in the dark – morale could be damaged.
• monitoring and record keeping will be more difficult
• further business development will seem too challenging or
unachievable.
Commercially minded leadership: All managers should be creative,
flexible, alert to new opportunities, concerned about standards of
performance, aware of targets, waste-conscious etc. But when they
are in charge of business activities these are qualities which they
are paid for; the earning capacity of their organisation depends on
them. Managers need to be constantly conscious of:
• what they have to sell, and what other services or commodities
they could be selling
• who might want to buy them, how valuable their services or
products are, how people can be informed about them
• the cost of the sales, in human as well as monetary terms
• whether the prices are right, how much income could be
generated, and how this could benefit the organisation
• the way customers see them and the organisation, whether
these customers will continue to do business with them, who is
currently the competition.
It is a tragedy that so many fine leaders in the third sector go into
social enterprise activities with no awareness of the challenge
which faces them, and then spend months or years discovering
business management by trial and error.
A focus on the value of staff:
• All the assets of the business have a value. But you need to
consider a reality which principled people in the third sector
sometimes find unpalatable: the assets include the employees,
and these have a business value (in addition to their value as
work colleagues, deliverers of services, friends, etc) which is the
equivalent to the income the enterprise generates as a result of
employing them.
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