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
You only want one or two: You are strongly advised not to try
planning for more than one or two at a time, or to start trading in
more than one business simultaneously. If the preliminary filtering
still leaves you with a short list of several apparently promising
ideas, you will need to refine them further. (The attempts by some
groups to launch several businesses in the expectation that one
of them will work out is as dangerously ill-judged as trying out
several partners simultaneously in the hope that one of them will
make a suitable husband or wife.)
• Aim to pick the one which self-evidently offers you the greatest
chance of success now.
• If the choice between two or more options is difficult you will
have to decide later on the basis of feasibility study research.
• If you end up with ‘spare’ ideas which are too ambitious\
expensive\problematic for the time being, or which are just
rather more uncertain, you can build them into a long term
‘development plan’ to guide future policy and convince
supporters that you mean business.
• Resist the temptation to start a multinational before you know
how to operate a till. If this is the first enterprise, go for trading
which will give you useful experience and prospects of early
success.
Step 3: The back-of-an-envelope budget
A very basic evaluation: Next, using no more space for your
calculations than you might have on the back of the proverbial
envelope, work out whether there is the remotest chance that your
business idea will work financially.
• There’s one simple question: could you conceivably earn enough
money in the course of a year to cover all the expenditure you are
likely to incur?
• The steering group might try this as a collective exercise. But
even if one member undertakes to do this on their own they
should feed back the results to the group in full.
• Remember, this is not business planning, just a quick, crude
assessment of possibilities. The figures will be approximations,
but they should be the best guesses you can make at present.
• It’s astonishing how many people wilfully avoid this exercise,
perhaps to spare themselves the disappointing truth that their
pet idea is really a non-starter. It’s vital.
• Don’t worry that this initial rough estimate will be inaccurate. So
far it’s the best information you’ve got. Something to build on.
49