A guide to third sector trading - WCVA
A guide to third sector trading - WCVA
A guide to third sector trading - WCVA
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It’s an idea, but is it business? A <strong>guide</strong> <strong>to</strong> <strong>third</strong> sec<strong>to</strong>r <strong>trading</strong><br />
1: Getting<br />
started<br />
2: First steps 3: Business<br />
planning<br />
4: Legal and<br />
governance<br />
5: Funding<br />
and<br />
resourcing<br />
6: Financial<br />
controls<br />
7: Managing<br />
growth<br />
8: Management<br />
and<br />
governance<br />
9: Social<br />
enterprise<br />
10: Sources<br />
of support<br />
• even if the funder has not awarded a tapering grant (with<br />
spending gradually reducing <strong>to</strong> zero over time) try <strong>to</strong> budget<br />
as if they did.<br />
Managing negative consequences: Direc<strong>to</strong>rs and managers<br />
should:<br />
• plan with the expectation that grant funding will decline (it will<br />
be a bonus if it doesn’t, but you could be goners if you don’t<br />
plan for it)<br />
• be prepared <strong>to</strong> drop business ideas that fail <strong>to</strong> take off without<br />
delay, before they cause damage<br />
• expect staff, volunteers and trustees <strong>to</strong> become nervous,<br />
frustrated and upset (change is always painful); keep people<br />
properly informed, use your diplomatic skills <strong>to</strong> dissipate any<br />
aggravation, and avoid getting involved in arguments which no<br />
one can win.<br />
Securing appropriate support: Enterprises often fail after two<br />
or three years at the point when initial support disappears.<br />
Try <strong>to</strong> establish the best possible support structures for your<br />
organisation, internally and externally:<br />
• but don’t cultivate all the support agencies in your vicinity – that<br />
will just lead <strong>to</strong> confusion<br />
• identify and follow good practice in the sec<strong>to</strong>r<br />
• get involved in networking with other social enterprises – if you<br />
don’t you are very likely <strong>to</strong> start reinventing wheels<br />
• make sure others know what you are doing, and don’t disguise<br />
your problems (which is the best way of ensuring they you<br />
won’t get help when you need it).<br />
Setting targets and measuring progress:<br />
• The approach: Public bodies which are funding social<br />
enterprises are increasingly expecting grant applicants <strong>to</strong> set<br />
targets for raising the level of earned income compared with<br />
grant funding which they receive. This might take the form of<br />
a written target <strong>to</strong> ‘generate 50 per cent of funds by earned<br />
income in three years and 75 per cent in five years’.<br />
• Moni<strong>to</strong>ring targets: Targets can be a helpful way for <strong>trading</strong><br />
organisations <strong>to</strong> start measuring their progress year by year if<br />
the sole objective is <strong>to</strong> abandon grant income.<br />
• consult one of the social enterprise support agencies, and keep<br />
in <strong>to</strong>uch with them<br />
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