Running a community business - it ain't easy, but it can be done

Our research looks at what makes a community business succeed

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Ailbhe McNabola

Head of Research and Policy

It was a full house on a warm June evening at the RSA in central London. People running a diverse range of community businesses were gathered to share their experiences and talk about what it takes to succeed.

Earlier that day, Power to Change published new research that closely examined established businesses in the community housingtransport and pub sectors, to identify key success factors. We wanted to find out two things: what we could learn from these established community businesses about what it takes to succeed; and what others working in the same sectors, or for organisations like Power to Change, could do to support them.

Matt Barnard from the National Centre for Social Research listed a few key things coming out of the research which includes three reports with detailed case studies. The balancing act, between being a business that needs to operate commercially, and still also fulfilling your social aims, marks community businesses out from traditional businesses and is both a strength and a challenge. Fundamentally, he said, you have got to be able to run your organisation as a viable business. But, because you’re more than just a business, you can leverage your position as an organisation that delivers benefit to the community, gaining crucial support from partners, from local authorities, and being able to rely on the support of the community and in particular of the volunteers who underpin the business.

Caroline Gore-Booth from Giroscope Housing described their very efficient community housing model, by running a business where they – to paraphrase Caroline slightly – ‘buy low and sell affordable’. Derelict housing is purchased, renovated, and offered at affordable rent. The process delivers as much benefit as the output, as the volunteers who work on the renovations gain important skills and training. Giroscope has always obtained loan finance and is able to operate independent of grant aid. And partnerships, for example with the local authority, have delivered much benefit, not always in the form of financial assistance but in other important ways.

Richard Healy of Barnet Community Transport inspired the audience with his story of a major turnaround in the fortunes of his organisation, from a point in 2006 where crucial funding was lost and the future looked bleak, to an organisation that is still going in 2017, delivering much-needed bus services to the local community. Even he, though, felt that the challenges never go away, and that managing the business and worrying about cash flow was simply part and parcel of running a community business. It was clear how much he and his business are driven by the people that it exists to support.

Perhaps Richard’s comments help to explain the resilience we see in community businesses. Our 2016 research showed very low numbers of organisations going out of business, certainly when compared to more traditional businesses. Each of the case studies in this research helps us with our understanding of what it takes to succeed, and they are well worth a read. And there’s more to come – we will be adding to this series with a look at community sports businesses, community hubs, and community businesses delivering health services. If you’ve got something to share on any of those, I’d be delighted to hear from you