A guide to third sector trading - WCVA

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It’s an idea, but is it business? A guide to third sector trading Who is this guide for? This guide is intended for people who: • are working in any capacity in a third sector organisation, or intending to start one, and • are hoping or planning to carry out trading activities, or already doing so • want those activities to be continuing, and not one-off ventures • want them to be sustainable, or self supporting in some way (we will try to be clearer about what this really means) • want the trading to create ‘profits’ or ‘surpluses’, and • want to use those surpluses for a social purpose, usually to achieve some charitable, social or community benefit. What do we mean by ‘third sector’? Different types of organisation have different aims. This guide is intended for any organisation which shares the ethos of most voluntary organisations, which means • working collectively • having a defined purpose • working on behalf of others, who can be almost any individuals or groups (but not usually shareholders) and include: − the designated beneficiaries of charities − the members of clubs and societies etc − all the residents of a community or district (for instance, if your organisation is a community centre or a regeneration partnership) • using a constitutional model (and a constitution is essential) which constrains you to operate through some kind of group or committee structure, which may or may not be democratic • all or most of the members of the committee or governing body of the organisation do not get paid for the job of running it. 6
It’s an idea, but is it business? A guide to third sector trading What if you don’t quite fit? There is no point in being contentious about it. There are exceptions to this definition, and if you fall outside it, that’s not a reason why you can’t succeed. Good luck. Trading This guide is about trading by third sector organisations in the widest sense. Customers may be public or private organisations, the users or beneficiaries of charitable projects, or the general public. The business activities themselves can be extremely varied. This list is not exhaustive, and there are more examples in Section 2.1, but this gives a flavour: • running shops selling second hand goods • running visitor attractions and gifts shops associated with them • charging entrance fees to regular entertainment events • delivering contract services for public bodies – for elderly or disabled people, for example • charging users for services such as nursery school places or training courses • consultancy work • letting offices, warehouse space or residential accommodation • production, repair or recycling workshops and factories • selling goods at markets or on the internet. What’s special about the third sector? Producing a trading guide intended ‘only’ for voluntary organisations (which embrace everything from new steering groups for a development trust with a turnover of zero, to national charities which spend millions of pounds a year) seems rather narrow-minded and partisan on the face of it. There are plenty of people involved in the world of private sector business who will tell you it’s just wrong-headed. • The ‘Business is business’ argument: Many business advisors and experts, economic development officers, public sector websites and real entrepreneurs will tell you bluntly that ‘business is business’. It makes no difference whether it’s the third sector or the private sector – there’s only one way to do it. If you want to be treated as special, they will say, you’re probably doing it wrong. Listening to their wisdom and nothing else, can undermine your confidence and leave you wondering why developing a business is so difficult. • Doing business on the moon: The reality is that doing business is the same, but the environment is utterly different. The rules of golf don’t change whether you play it on Earth or on the Moon, but you need to make some adjustments to play successfully in one fifth gravity and zero atmosphere. 7
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A guide to third sector trading - WCVA

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