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
• If that’s what the funder wants... Bad planning starts with the
idea that all that is required is a document which simply says what
you think the funder wants to hear. The very best you can hope for
is the award of a grant to do something which is quite likely to be
impossible (not that you will know one way or another).
• At least we can produce a good bid: Most people who attempt
to develop third sector trading activities don’t bother to plan
them at all. They make out a case for investment (grant funding).
This is normally an impressive description of a business idea with
neatly blurred answers to all the tough questions about markets,
cost, skills and management. This emphasis on presentation to
persuade funders (who sometimes know as little about business
development as the applicants) may account for the curious fact
that third sector business plans are often much better produced
than those for larger scale private ventures, and may be more
image-conscious than the real-life businesses they describe.
• We’ll decide what to do when we know how much we’ve got:
It may appear to save time to deliver an impressive, plausible but
invented plan to funders and make it fit reality later if the bids are
successful. But that means doing the planning job twice, and going
into contortions to disguise your subterfuge when the grant comes
through. This barmy behaviour is extremely common.
• We’ll get more if we exaggerate: A common deception is to
inflate dramatically the sum applied for in the expectation that
the funder will grant something less which may be more or
less what the project actually needs. There’s a lot to be said for
attracting public and charitable money into poor communities –
but not when it produces weak enterprises and eventual failures.
The approach is deeply flawed:
− if your plan distorts your funding needs it’s highly unlikely that
anyone knows what your real needs are
− your plan is worthless as a tool for monitoring the progress of
the business and its finances
− the practice of producing deliberately misleading business
plans is self-defeating because it may well produce unwanted
responses from the funding body later – scepticism, suspicion,
invasive or obstructive monitoring, unhelpful controls and
conditions, and resistance to repeat or follow-up grant requests
− have you thought what you’ll do if a funder foolishly gives you
more money than you need? without a good business plan
you’ll probably waste it.
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