community enterprise start-ups

Community Enterprise start-ups

Sophie Michelena

Development Manager

The context…

The Locality way…

Introductions

Who do you represent today?

1. A community organisation

2. A company/social enterprise

3. A local authority

4. A support organisation

5. A consultancy firm

Poll 1:

1. What is a community enterprise?Legal Matters

2. Income generationIncome mix

3. Markets & Business planning

4. Finance & Keys for success

CONTENTS

...for & by a defined community

A social enterprise…

What is a community enterprise?

SocialEnterprise

Charity / VCS

Private Sector

Charitable Income Commercial Income

What is a community enterprise?

£

social

environmental economic

Community Ownership ?

Profit Distribution?

Pathways to Enterprise

Community Enterprise

Community Project

Community Asset

Enterprise Start up

What is a community enterprise?

What is your legal structure?

1.We are unincorporated2.We are incorporated 3.I don’t know

Poll 2:

1. Social enterprise is it for me?

Unincorporated: not a separate legal body

Legal Matters

Advantages

Quick to set up

Light touch regulation

Relatively informal

Disadvantages

Risk of employing

Risk of contracts/ transfers of land

Personal liability /disputes

1. Social enterprise is it for me?Legal Structures: Form Follows Function

Registered charity of

some form

Company Limited byGuarantee

Provides childcare services

CICOwning and operating

market garden

Company Limited byShares

Owns and runs pub

Trading Subsidiaries / hybrid structures

2. Legal StructuresLegal Matters

Q & A session 1:

The Right BalanceIncome Generation

A little help?Income Generation

Funding reliantIncome Generation

CollapseIncome Generation

Work with othersIncome Generation - TIPS

AdaptIncome Generation - TIPS

DiversifyIncome Generation - TIPS

- grow food - run educational programmes

- run a vegetable bag scheme

Growing Local is Going Local

Income mix – an example

•

GRANTS TRADING WITH THE PUBLIC

CONTRACTING FOR PUBLIC SERVICES

ASSET DEVELOPMENT

Income Mix - types

Q & A session 2:

WHAT is needed in YOUR area???

•

Markets

How much information have you got from listening to your community’s needs and doing market research/competitor analysis?

-Not much at all

-Some, could do better

-Enough, happy with it

-We have lots of useful data

Poll 3:

Business PlanningWhy write a business plan?

• understand your organisation and where it’s going

• raise awareness & obtain approval/funding from others

• from a concept to the detail

• help you track progress

The Planning Hierarchy

MISSION

AIM AIM AIM

Obj Obj Obj Obj ObjObj

Outputs

Outcomes

ImpactsResults/ Deliverables

Strategic Planning

BusinessPlanning

Business Planning

Broad Brush Business PlanSummary

Description of the project and its objectives

Description of management and governance processes

Market assessment

Estimate of capital costs

Estimate of fixed revenue costs

Estimate of variable revenue costs

Projection of capital funds

Projection of revenue income

A cash flow

Breakeven and sensitivity analysis

Risk Assessment

Q & A session 3:

Finance Needs

–Development Finance – grow change or die - (for R&D, new project development, investment readiness, future planning)

–Capital development – acquiring assets - for refurb, new build, equipment

–Working Capital – –Early trading–Monthly turnover

What Do You Want It For?

• Local or National Grants• Big Lottery• Community Foundations

• Social investors• Key Fund• Charity Bank, Triodos Bank, Unity Bank

• Community investors• Share issue• Donations/crowdfunding

–http://locality.org.uk/projects/power-change/investment-support/

Financial & Social Capital

Keys for success

?

1. Know your USP2. Be ‘business like’ – negotiate3. Be outward looking and opportunistic4. Have the confidence to invest in an idea 5. Take Business Planning seriously 6. Strong risk management (but being willing to

take risks)7. Think about customers (not just beneficiaries)8. Sell your service and organisation9. Skills, knowledge, experience in your field10.ENTERPRISING ATTITUDE

What score did you get out of 10?

•1-3

•4-6

•7-9

•10

Poll 4:

Q & A session 4:

Sources of supportPower to change

http://locality.org.uk/projects/power-change/

Guides and support tools

http://locality.org.uk/projects/power-change/resources-tools/resources-

community-enterprises/

Contracts/Services pre-feasibility

http://mycommunityrights.org.uk/community-right-to-challenge/grants/

Thank you!

If you want to network with others Locality convention

17 & 18 Nov, Cardiff

Sophie.michelena@locality.org.uk

Join our next webinar oncommunity enterprise

Dates TBC

locality.org.uk/subscribe/