Wednesday 14 April 2010

What does being a Social Entreprenuer mean to you? Interview with Schools Plus CEO

What does being a Social Entrepreneur mean to you?

6 years ago, whilst sitting at “his boring desk, on a boring day, in a boring job”, James Woods was contemplating how private enterprises could benefit schools. A lot of hard work and three loans from London Rebuilding Society down the line, his company ‘Schools Plus’, is now a nationwide operation. The idea is simple; Schools Plus manages and lets school premises to the local community during evenings, weekends and holidays. The local community is provided with cheap and accessible facilities and the school is gains extra income. As the Times Educational Supplement says ‘Everyone’s a winner”.

London Rebuilding Society likes to keep up to date with our borrowers. We wanted to know what being social entrepreneur meant to James.

Does social entrepreneurship require any specific skills?
Same as for entrepreneurship: integrity, commitment, reliability, people skills.

What are the greatest challenges when setting a social or ethical enterprise as opposed to a regular business?
I believe in what I do, and so do the people who honour me by carrying my brand. This is many ways has made it a bit easier - or should I say fractionally less difficult - to set up this business. If you believe in what you do, it shines out of you, and encourages people to work with you, either as customers, suppliers, staff, or in some other capacity.

There’s much talk about social enterprise going ‘mainstream’, that is, being accepted as an element of the private sector. As a social entrepreneur, do you consider what you do to be distinct from private enterprise?
No! I think that most businesses are social enterprises. They create jobs and they provide something of value to the communities they serve. I include supermarkets, clothes manufacturers, pharmaceutical companies and banks. If your product is basically good for people; and you do business in an ethical way, then I think you are a "social" enterprise. Rather, the emphasis should be on restricting the small minority of businesses which are not social - e.g. they create a noxious product like cigarettes; or they abuse some of their stakeholders.

Do you think that social enterprise offers an alternative model of doing business or can at best supplement traditional for profit trading activities?
I hope that we are moving towards an environment where social enterprise is the only legitimate way of doing business. I believe that all business should be transacted ethically; I believe that everyone should be confident that the end goal of their business is something that benefits the human condition; I believe that all stakeholders should be treated correctly. Any business that fails to meet these standards is barely tolerable.


What single policy change would be greatest benefit to the social enterprise sector?
A wholesale commitment by government to contract intelligently with numerous businesses to deliver services. We live in an immensely privileged time, when we all benefit from the provision of education, healthcare and other services to us. This is great. But the delivery mechanisms still fall short of where they could be. This is an ideal space for social enterprise to engage by coming up with innovate solutions, that provide a better service at a lower cost (both financial and environmental).


Schools Plus has recently become involved with the Charity ‘Crisis’. With the blessing of the head teacher and the local council Islington Arts and Media School opened up their doors to the homeless during the Christmas period.
The school was opened from 6.00am till 10pm providing hot meals and warmth to 180 customers who were looked after by a band of volunteers. The school classrooms were converted in to medical and dental clinics, hairdressing salons, workshop spaces and advice centres. A cinema was available and the school’s sports hall used on a daily basis. The school children had left a wall of welcome letters and the customers responded by leaving a thank you board of letters and pictures. Crisis was so pleased that they are working with School Plus to find additional sites for future programmes.

To find out more about Schools Plus or their Crisis project visit their website www.schools-plus.org/

Tuesday 30 March 2010

Business Planning - 10 Top Tips

When you are looking for finance to start or expand your social enterprise, above all you need to convince potential lenders that you are a sound investment. You need to show them how your dreams will develop into long-term viability by presenting a business plan that is accurate, believable and complete.


But there are other reasons for having a business plan too. It helps to communicate to all your employees exactly where you are going with your business, and how you are planning to get there; that way everyone can pull together, and knowing how their own efforts fit in to the whole is both much more efficient and more motivating.


At London Rebuilding Society we like to see the following elements in a business plan when we are assessing an application for a loan:

Summary

It is important to start with a clear statement of exactly what the business proposes to do (ideally in two minutes - the ‘elevator pitch’). It’s surprising how many business plans omit this; if you can’t explain clearly what you intend to do, how will you be able to do it?

Social Impact

You also need to explain why this is socially, environmentally or ethically of benefit, and to whom. Will jobs be created or safeguarded? Which stakeholders will be involved?

The Market

You need to show that you have a complete understanding of the market you are going to be operating in. The future trends, your potential customers and what motivates them, the needs which are fulfilled by your product or service, actual and potential competitors, how your offer is different form others in the market.

Product /Service and Operations

Explain the nature of the business model - the product or service and the operation, and the form and process of production and delivery.
Aims and Objectives

This should include your vision for the business; positioning; barriers to growth; SWOT; targets and objectives; critical success factors

Organisation

Here say which legal structure you have chosen and why, and how your enterprise will be managed and organised, including details of key employees, board or management committee - their track record, strengths and weaknesses. Explain the staff (skills, management, and commitment) that will be needed, and the personnel management policies that will be applied. Also the relationship with suppliers and customers, and ethical policies and practices.

Resources

Here you need to show that you have a realistic understanding of the other resources which will be needed to run the business - premises, equipment, systems including IT, etc.

Marketing

Explain your planned Marketing mix - the four Ps: product; pricing strategy; place/sales channels; promotional strategy. Summarise your sales and marketing plan; key customers; marketing costs; sales management; sales forecasts.

Finances

Track Record

Historical audited figures, if applicable; how the business has grown, how profitable it has been, what has financed the business to date?

Projections

Financial projections are there to show that the business will generate enough in surpluses to repay the loan. You should show that these are based on sound assumptions e.g. show best and worse case scenarios. You should also be clear and realistic about all the costs involved in running your venture. Including an analysis of margins, breakeven and sensitivity will show that you understand profitability.

First of all you need to forecast your monthly cash flow over the next three years - that is, the exact month where cash will enter or leave your bank account. Then you need to construct forecast Profit and Loss accounts and Balance Sheets for the next three years. London Rebuilding Society has a simple model to help you do this - it is available under the Business Support tab on our website.

Risks

A summary showing that you have assessed and understood the main risks to the business, their likelihood and impact, and have a strategy for mitigating them. These can be external (the market, the environment, competition, etc.) or internal (the product, operations, personnel, financial, etc.).

Applying for a Loan: 6-point checklist

Applying for a Loan: 6-point checklist

When you are looking for finance to start or expand your social enterprise, above all you need to convince potential lenders that you are a sound investment. You need to show them how your dreams will develop into long-term viability by presenting a believable business plan.

At London Rebuilding Society we primarily look for the following when assessing an application for a loan:

• A clear statement of exactly what the business proposes to do (it’s surprising how many business plans omit this! And if you can’t explain clearly what you intend to do, how will you be able to do it?);

• Why this is socially, environmentally or ethically of benefit;


• An understanding of the market: trends, potential customers and what motivates them, the needs which are fulfilled by your product or service, actual and potential competitors;

• How your enterprise will be managed and organised, including details of key employees, board or management committee;


• An realistic understanding of the other resources which will be needed to run the business - premises, equipment, etc. ;

• Financial projections showing that the business will generate enough surpluses to repay the loan.

Friday 26 March 2010

Defining Social Enterprise

Social Enterprise has become something of a buzz word of late. With the arrival of the Mark there is an attempt to consolidate the identity of our sector. But have we got it right? A catch-all term has some serious draw backs.

A recent survey concluded that there are a lot more social enterprises around than are usually acknowledged: it was able to say this because it included in the broadest definition, any businesses whose founders said that they wanted to make a difference.

With such inclusive criteria, almost any business might be said to have a social dimension, since in a market-economy firms meet our needs at prices we can afford, and are able to provide both employment, dividends to our pension funds and revenues to government in the process.

At the other end of the spectrum, charities and grant-dependent voluntary-sector bodies are being claimed as social enterprises. Although more and more they are taking on contracts to deliver services instead of the state itself, such bodies are essentially economically passive entities, rather than enterprises, creators of financial wealth.

An inclusive definition of social enterprise has its uses, making all economic actors aware of what they have in common, and of their collective and individual responsibility for our welfare and environment. But the term was originally coined to embrace enterprises with a particular set of characteristics that separated them not only from the public sector and the private sector, but also from the charity and voluntary sector.

In the European context, the term social economy embraces the set of autonomous collective self-help bodies - co-operatives, mutuals and associations - which are democratically accountable to their beneficiary stake-holder group: they are mutually-owned trading organisations. So they differ from private enterprises where neither customers nor employees are included in the control of the business, and from charities, which by definition are not run for the benefit of those that run them.

At a time when both private sector markets and state provision are seen to have their weaknesses and limitations, people are keen to find alternatives, and “social enterprise” is held up as a solution. There is the danger however, that a vague definition, that does not acknowledge the different characteristics of a socially responsible private business, a charity, and a co-operatively-run facility will not allow us to see the benefits and disadvantages that each model has in particular circumstances, industrial sectors, and relations of production and delivery.

Monday 8 March 2010

Health and Housing - a wake up for policy makers

LRS has been represented at several events this month where discussions centred on the link between housing and health. This is finally being recognised at a strategic level with the publication of three high level reports: the Audit Commission report 'Under Pressure', the Marmot Review 'Fair Society, Healthy Lives' and the Building Research Establishment (BRE) report 'The real cost of poor housing in England' (see links below). These reports recognise that housing is a key determinant of health and argue that, with an ageing population, we have to do more to ensure a healthy population and reduce the effects of poor housing on NHS costs. The BRE report shows that more than four million seriously unhealthy homes exist in the private sector and these cost the NHS £600 million a year and society as a whole £1.5 billion.

The Chartered Institute of Environmental Health (CIEH) president Dr Stephen Battersby said 'At a time when resources in the public sector will be restricted it is important that all possible sources of funding are used as efficiently as possible with resources shared to better address the impact of poor housing on health'.

Howard Farrand, President of the Chartered Institute for Housing (CIH), has written to the Times, saying 'we call upon the relevant government departments to make unhealthy housing a priority for action in the next parliament. We hope that this will tackle what is a national tragedy. Prevention is better, and more cost effective for us all, than cure'.

London Rebuilding Society welcomes these reports as they highlight not only the role of housing as a key determinant of health, education and general well-being but also the benefits to the public purse and environment of addressing housing problems through a multi-agency appoach (such as that piloted by the London Rebuilding Society Home Improvement Scheme).

Policy makers must not become daunted by the size of the challenge facing them. Organisations such as London Rebuilding Society are providing working, practical solutions to housing problems. These reports have provided a wake up call for policy makers, it is now time for them to roll up their sleeves and get on with the task ahead...

www.marmot-review.org.uk
www.bre.co.uk
www.audit-commission.gov.uk/nationalstudies/localgov/underpressure