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
In this key respect a successful social enterprise business has to be
like any other business – challenging, hard work, complicated, and
quite possibly insecure, and hopefully personally rewarding in the
end. Don’t bother starting a trading project if you won’t be able to
staff it with people who are prepared to work hard for modest pay.
It’s an idea, but is it a business?
Starting from ignorance: It’s useful to start from the assumption
that you don’t really know what you’re doing, but you are
prepared to find out. Countless new third sector trading groups
fall prey to over-enthusiasm and self-deception because they fail to
make the simple distinctions between:
• providing a service and running a business
• business possibilities (things they could do) and business
opportunities (enterprising ideas which might work)
• enthusiasm for an idea and knowledge of what it actually
involves.
Some wild and damaging misconceptions: Community groups
and charities on the whole make pretty poor decisions about the
trading activities they get involved in. Let’s start by exploring what
it probably shouldn’t be. Before you finally establish what your
trading activity will be, here’s what you should not be thinking:
• We have the expertise, we have the technology... It obviously
helps if you have the skills and resources you need to run a
business. But those advantages have no bearing whatever on
whether customers will part with their money. You need more
than a well-equipped kitchen for a successful catering business,
more than a unemployed horticulturist to run a plant nursery,
more than a computer to run a print design service.
• Wouldn’t it be nice... Enthusiasm for an idea is a great help
if you try to turn a private hobby into a trading venture. But
without objectivity and the involvement of people with many
other skills and interests it can also be a handicap. Groups of
railway enthusiasts, for instance, may struggle for years to reopen
extinct lines. But very few of them ever run successful railways.
• There’s a need, so there must be a market... A particularly
common delusion is that if there is a demonstrable need for a
particular service, there is bound to be a demand for it. A realist
might advise that the needs probably exist because there is no
commercial demand. A good example are children’s nurseries:
many of the people who need daycare most to improve their
employment prospects could never afford the rates that a viable
business would have to charge.
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