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
• Not doing what you want: But the demands of sustainability
mean that your priorities may have to change. The profitable
part of the enterprise has to come to the fore, so that:
− it now gets the lion’s share of investment
− it may occupy the best premises, marketing and promotion
− it occupies more of the manager’s time
− directors take notice of what it does
− it may be managed by its own subsidiary company to make
sure its interest are properly looked after.
The sources of tension: Is this what all the sweat equity in setting
up your enterprise has come to? Some staff and directors may
feel uneasy that business has taken over, and there may even be
resentment.
• People who joined the organisation to work in the successfully
trading business will not have the same feelings for the
social project which kicked it all off. To them it’s ‘just a job’.
Volunteering, social activity and board level management may
even appear to them as weaknesses.
• To the stalwarts who brought the enterprise this far, their
involvement is a commitment, sometimes their whole lives. The new
paid workers are undermining the cause, weakening the venture.
These are serious challenges which can undo years of dedicated
hard work if they are allowed to become divisive.
Holding it all together: But the damage can be avoided with
sensitive but firm management:
• Keeping your soul separate from your pocket: It is perfectly
possible in most enterprises to separate business activity from
social objectives. There is no need to lose your soul if you keep
mammon in another room, and make sure the interests of the
organisation’s social heart are properly served – with separate
activities and promotions, volunteer or supporter groups, a
proper place in the annual report etc.
• If they can’t be separated: Sometimes the business and the
social purpose cannot be separated – as in the case of the
plastics recycling business which provided work for people with
learning disabilities and discovered the staff could not work fast
enough to fulfil their main contract. This is not an argument for
not becoming involved in social enterprise activities, because it
is extremely rare for an organisation to abandon its social goals
altogether to become a purely trading organisation. But it can
raise difficult questions about:
− the planning and costing involved in preparing contract
bids, and
210