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
The real benefits of third sector trading
Types of benefit: Having dismissed the hype and misconceptions
we can start to be more positive. The genuine advantages of
trading can be enormous. You just need to be clear why you are
doing it. The benefits can be divided into two main types:
• the direct impact of the trading itself, such as caring for
elderly or disabled people by running a day centre which no
one else is prepared to provide
• the indirect benefits of trading, such as creating new
economic activity and jobs, irrespective of what type of
business is involved.
Direct social benefits:
• Services not provided by the public sector: Voluntary
organisations have been less active in providing social care than
was expected when the private sector involvement in care for
the elderly expanded dramatically in the 1990s. But when they
do, they commonly claim that they do so because they believe
their services are better than those provided by the private sector
(which operate with the aim of making a profit) and public
authorities (whose overheads are often higher and may be
partly hidden).
• Buildings and services devolved by the public sector:
Government policy, economic pressures and public spending
cuts are encouraging local authorities to transfer the delivery of
some services to community groups. Community centres are in
the front line of this movement. It is obviously vital for groups
taking responsibility for community buildings to have:
− a business plan which shows how they can be run sustainably, or
− a sound contract with the authority (supported by a business
plan) for providing the service, which at least covers the costs
of the annual deficit.
• Preserving vital services: It is not uncommon for community
groups to step in to take over services in rural areas (and
occasionally in seriously disadvantaged urban areas) which
private operators no longer find viable – this includes shops,
post offices and pubs.
• Making community buildings and services sustainable:
Where buildings are already owned by community organisations
or charities it is becoming increasingly important to operate
them as businesses to replace disappearing grants and meet
rising operating costs.
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