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Route map from Charity to Social Enterprise

Route map from Charity to Social Enterprise. John Mayford, Olmec Director. Welcome and introductions. Introductions – what do you want from the session? Olmec story from a charity to a social enterprise Social enterprise model Legal structures Viability Options Issues for you ?.

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Route map from Charity to Social Enterprise

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  1. Route map from Charity to Social Enterprise John Mayford, Olmec Director

  2. Welcome and introductions • Introductions – what do you want from the session? • Olmec story from a charity to a social enterprise • Social enterprise model • Legal structures • Viability • Options • Issues for you ? www.olmec-ec.org.uk

  3. Olmec • Founded in 2003 as a Charity and SIA subsidiary of PHA then NHHG • June 1st 2010 became an independent Charity and social enterprise • Programmes in social enterprise, employment services, community leadership, community development, equalities and diversity, community art, research and evaluation www.olmec-ec.org.uk

  4. Olmec’s journey Olmec provides: • social enterprise business support • employment services • community development • equalities and diversity consultancy • community arts • community research • Proposal to test the viability of an independent social enterprise • Social enterprises are businesses, that need: • Skills in the team • A product(s) • A market (s) • Astute financial management • Passion www.olmec-ec.org.uk

  5. Sectors VCO Private business Social enterprise Grants and Sales Grants /SLA/ Donation Sales/ Market Profit Profits and Community Benefits Community benefits www.olmec-ec.org.uk

  6. Social enterprise definition The Department of Trade and Industry (BIS) defines a Social Enterprise as: “a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for the share holders and owners.” www.olmec-ec.org.uk

  7. Co-operative principles 1844 • Open and voluntary membership • One member one vote • Member economic participation • Autonomy and independence • Education and training • Co-operation with other co-operative • Social alongside economic aims www.olmec-ec.org.uk

  8. Social Enterprise Sector • 4,992 Co-ops with 12.9 million members, providing 237,800 jobs turnover of £33.5 billion • Small Business Survey (SBS) estimated in 2005 that 1.2 per cent of all business were Social Enterprises, equating to 15,000 business’ £27 billion turnover • The Social Enterprise Coalition uses later SBS data to calculate that by 2009 there were approximately 62,000 social enterprises in the UK. • Delta Economics employ a wider definition of social enterprise estimating that the sector provides over 2.09m jobs in the UK economy raising the figures of SE’s to 232,000. • Olmec takes this “big tent” definition of social enterprises, sharing Delta’s broader perspective. It is clear from these figures that social enterprise is playing an increasingly significant, if not mainstream role in the UK economy. www.olmec-ec.org.uk

  9. Legal structures for social enterprises • Companies act • CLG • CLS • Workers co-op CLG/S • Consortia co-op CLG/S • Multistakeholder co-op CLG • CIC CLG CLS • Co-op CIC CLG CLS • Industrial and Provident Societies Act • Workers co-op CLG/S • Consortia co-op CLG/S • Community co-operatives • Society for the benefit of the community • Charitable society for the benefit of the community www.olmec-ec.org.uk

  10. How income is seen by sector VCO • Budget • Full cost recovery • Cash-flow • Annual accounts • Reserve target • Treasury management • Investment plan • 3-5 year business plan Social enterprise • Budget • Cash flow • Monthly managed accounts • Price modelling • Contribution analysis • Break even point • Investment requirement and plan • Growth plan • Reserve target • Known working capital requirement • Return on investment www.olmec-ec.org.uk

  11. Sustainability: viable over time • Sustainability: • Mission / Business model • Business cycle • Income • Human resources • Delivery • Quality of delivery • Successful over time • Measures • Stakeholders AGM • Stage of growth • Financial controls • Governance, retention • KPIs • Q A S • Planning mechanisms www.olmec-ec.org.uk

  12. Understanding the cash cycle Profit Finance Cost of finance Your social enterprise Invoice paid • Creation of product / service • Premises • Labour • Materials Issue invoice Delivery to customer

  13. Viability tested through business planning 1. 0 VISION 1.1 MISSION 1.2 VALUES 1.3 LEGAL STRUCTURE 1.4 INTERNAL GOVERNANCE 1.5 OLMEC ACCOMMODATION OPTIONS 1.6 BUSINESS MODEL 1.7 BUSINESS CASE 1.8 BUSINESS RISK 1.9 KEY MILESTONES 2.0 FINANCIAL STRATEGY OBJECTIVES 2.1 GRANT AID APPLICATIONS 2.2 PRODUCT SERVICE DESCRIPTION 2.3 PRICE MODELLING 2.4 VIABILITY FINANCIALS2.5 BUDGET 2.6 BUDGET COMMENTARY AND ASSUMPTIONS 2.7 CASH FLOW 2.8 FIXED COSTS AND VARIABLE COSTS 2.9 RESERVES 3.0 BANKING 3.1 TREASURY MANAGEMENT 3.2 PRODUCT DEVELOPMENT 3.3 MARKET ANALYSIS 3.4 HUMAN RESOURCES 3.5 EXISTING CONTRACTS 3.6 OLMEC’S PROGRAMMES 3.7 CURRENT TEAM 3.8 POLICY AND PROCEDURE REQUIREMENTS 3.9 BASE STANDARDS 4.0 COMMISSIONING STANDARDS 4.1 CONTRACTS 4.2 INSURANCES 4.3 QUALITY ASSURANCE AND EVALUATION 4.4 TRIPLE BOTTOM LINE www.olmec-ec.org.uk

  14. Business Model Have you assessed your business model? Post mission statement exercise • Essence of what an organisation does • Essence of the delivery model • Brand value www.olmec-ec.org.uk

  15. Options • 1 organisation: Conversation to social enterprise • 1 organisation: it’s a charity with trading activity • Charity with social enterprise arm (subsiduary relationship) • Social enterprise with Charity arm arm (subsiduary relationship) • Sister organisations: SE arm Charity Arm www.olmec-ec.org.uk

  16. Group exercise and discussion Identifying key issues • Models • Challenges • Opportunities www.olmec-ec.org.uk

  17. Contact us • For more information: www.olmec-ec.org.uk John Mayford Director T: 020 7749 5163 E: john.mayford@olmec-ec.org.uk www.olmec-ec.org.uk

  18. Olmec 2 Bath Place Rivington Street London EC2A 3DR www.olmec-ec.org.uk

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