trading not for profits

Thoughts on trading in the not for profit sector….

Tony Okotie22 September 2014

The legal and financial structure is the easy bit

Or….

There is no pot of gold at the end of a magic rainbow

Where will the future income come from?

• Reduction in public sector budgets– but someone still needs to pay for services!

• Increasing move to payment by results• social impact bonds etc

Where will the future income come from?

• Personalisation /self payers

• Trading / selling ‘something else’• Which generates a surplus to

contribute to core activity

What have you got to sell / trade?

• What assets does the organisation have?– People / track record / buildings etc

• Is there a ‘market’? – will someone pay?

Developing the product / proposition

• Business development ‘phase’ vs organic development?

• What can we charge?

• Who is our competition?– and from which sectors?

Developing the product / proposition

• Marketing it – how?

• At what point does it generate a surplus?– after R & D and FCR taken into account?

Personalisation

• Demographics / economic base of residents in city– Challenge around ability / willingness to pay?

• Increase in number of customers = lots of transactions– Cashflow issues?– Cost / effort to recover small transactions

Cultural change• How does charging sit with the culture and values of

your organisation?– Loss of focus on ‘core business’– Staff as ‘sales people’?– “its only real money when its in our bank account”

• Does the organization have the skills to be ‘more commercial’?– Or bring in new ‘commercially minded’ staff?

• Not right for everyone– and not as easy as some would think

Tony OkotieChief ExecutiveLCVS

e: tony.okotie@lcvs.org.ukt: 0151 227 5177Twitter: @tonyokotie