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
Clarifying your ideas - your vision, aims and business: Most
steering groups necessarily start with only vague ideas of what
they want to do and gradually arrive at a definite, collective idea
through planning and discussion. Here is a checklist of questions
which can help to guide the process:
• what is the need for the enterprise?
• what will the ‘social purpose’ be?
• what do you want to change or achieve in the long term?
• what can you realistically expect to achieve within 3 to 5 years?
• what will you do to earn money?
• will anyone pay you? how much?
• how much will it cost to run?
Why all the chat? You may personally find that the answers to
the questions above may be very straightforward. But sometimes
it can be difficult to be specific or to reach agreement in the
group. You are storing up problems for later if you are not clear
where you are going and if there is not a fair consensus about this
at an early stage within the steering group or the organisation as
a whole.
Be clear about the needs
Aren’t the needs already clear?
• The need for the proposed trading activity may seem obvious.
But a careful analysis of the community or charitable needs
you are aiming to meet can be important for deciding who will
benefit from your enterprise and how you run the project, or for
persuading funders to support you.
• For regeneration organisations such as development trusts it can
be confusing and even contentious if you don’t acknowledge that
you are trying to address a variety of social and economic needs
simultaneously, and that they may need to be prioritised.
• Aiming to meet a range of different needs can be good practice
– it brings in more potential board members, supporters and
funders. But make sure everyone on the steering group knows
where they stand.
• Take the simple example of a recycling project which will
employ people with learning disabilities. Will it trade to create
permanent jobs for people, to develop skills and confidence, to
provide environmental benefits, or to maximise income to keep a
worthwhile social project afloat? Or will it do all of these things?
Without a clear view the business may end up with the wrong
contract terms, poor staffing arrangements and an inappropriate
board of directors.
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