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
What’s the point of planning?
Persuading funders: The vast majority of business plans
produced by third sector organisations have the single purpose
of persuading funders to respond positively to grant applications,
and less often, requests for loans or buildings. This is a fact of
life (even though this can have a seriously adverse effect on the
plans themselves and the quality of the resulting enterprises if
the planning is badly handled). But the guidance in this section
is intended to encourage organisations to take advantage of the
demanding planning stage so that they can get as much benefit
from it as possible.
The purpose of business plans: The universal scramble to use
business plans to secure grants or loans tends to obscure their
wider importance in developing any enterprise – with the result
that many organisations go to a huge amount of trouble and
expense producing documents which bring them rather limited
benefits. You should try to take on board the full range of reasons
for business planning:
• to support applications for grants and loans
• to define the purpose and nature of the business, particularly
where trading is one aspect of an organisation with wider
charitable or social objectives
• to promote your proposal to potential supporters
• to attract and inform new directors
• to understand your markets and provide an assurance of the
viability or sustainability of the venture before you start
• to provide financial and operational targets which will be used
to monitor progress and guide future action
• before all of this, to provide a drafting process which allows
you to examine the proposal in fine detail – you can properly
understand, design and control the future enterprise.
The benefits of the planning process: The final business plan
document and the value of the written material it contains are just
one type of outcome of the planning process. Other outcomes are
the experience of producing it, and the internal documents which
have been produced along the way. Don’t recoil when a funder
asks for a business plan. Good business planning can:
• help you to clarify your objectives, and to share aspirations with
your colleagues
• encourage teamwork among members of your group
• force you to test the prospects for viability with figures
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