Not that I’m into feline cruelty you understand but this old English proverb sums up an approach to life and business that breaks free from fixed ideas of how things are supposed to work. Once you let go of those fixed ideas you open the door for creative and often unexpected solutions to arise and help move your project, business or life in the direction you want to go.
A good example of this, is how charities, social enterprises and not for profit groups can look to a more commercial approach to make their activities more self sufficient. There was a time when there was a sharp dividing line separating charities from businesses. Charities were good at getting donations; businesses were good at selling and never the twain would meet. With government funding cuts touching all areas from social care to the arts, there is now a greater imperative than ever to create profitable income streams to support a range of projects, organisations, charities and not for profit groups that seek to create a better world.
This isn’t new. Many well known national charities have been in retail for many years. Just look down any high street and you’ll see a bunch of charity shops doing a brisk trade. If you are involved with a project or enterprise that exists because of a vision for social good or a passion to preserve you may struggle to recognise the freedom creating profitable income streams can give you.
What does a profit making income stream look like?
A profit making income stream needs to have some connection with the core activity of the enterprise. It needs to return a decent margin, 40% plus. It needs to complement the core activity and potentially offer donors, supporters and customers an enhanced experience of the work of the charity, project or enterprise. Additional benefits could also include advertising and promoting the core activities of the organisation, bringing more volunteers into the activity. Examples include:-
- A heritage railway offering catering options on site and/or on train to subsidise the running of steam trains, see Gwili Steam Railway
- A charity selling clothing to both promote the cause and raise funds Bras not Bombs
- Growing Well, a land based mental health charity, diversifying into potted herbs to generate income to support the volunteering opportunities they provide.
- A council/private partnership providing affordable access to water sports in Swansea. It incorporates a beach side cafe/restaurant to subsidise the non-profit making water sports activities. Swansea Bay 360 was planned from the outset with this business model so it is never too early to look at this aspect.
When is the best time to set up income generating streams?
Thinking this way early in the game, puts financial sustainability at the heart of your activities. This will stand you in good stead when you come to apply for funding. It will also attract commercial skills to your enterprise either by drawing out existing skills amongst your staff or volunteers or by providing an opportunity to bring in those skills in the short or long term.
You may be wondering if putting commercial income streams might get in the way of your core aims.
Why distract from the core activity in this way?
Depending on donations, grants, bequests, government funding or tin rattling is increasingly difficult. In fact many grant applications now want to see evidence of financial self sufficiency or at least that your project or organisation is heading that way. Getting those involved in the project to generate income generating ideas can unleash all sorts of skills and passions you didn’t know existed in your organisation. It can help to bring in someone with commercial experience to facilitate these discussions and gently guide towards activities that can return a healthy margin for the organisation.
Remember there is more than one way to skin a cat. Thinking laterally can open up a range of potential income streams to give you a more robust and self sufficient project or organisation.
If you’d like to hire me to facilitate a discussion on developing profit making income streams, do email me.