One of the commonest reasons for funders paying later than predicted is
the late submission of reports and claims by grant recipients. It really is
important to prioritise this work.
It is advisable to be conservative when making assumptions about when
customers or funders are likely to pay.
Financial management systems
As well as showing an appreciation of the key financial issues and an ability
to summarise them in a cash flow forecast, a major section of the business
plan should be devoted to explaining how the business will stay in control
of its finances once it commences trading. It is generally unnecessary for most
social enterprises to use a complex financial management system; a few basic
elements should cover the key functions of record keeping and providing
useful management information. Often, all of these functions can be catered
for in a simple PC-based accounts programme. A spreadsheet programme,
or even a paper cash book, can be used for book-keeping. Cash flow forecasting
can be done on paper, but will be quicker if a spreadsheet programme is used.
The combination of a basic bookkeeping system and a monthly report of actual
income and expenditure against a cash flow forecast will be adequate for most
small businesses. Basic accounts packages will be able to speed up book-
keeping, make managing debtors and creditors simple, and produce reports
automatically, including profit and loss accounts and balance sheets at any point
during the year. The intention to use an accounts package would be likely to
inspire confidence in funders and the bank manager.
Simple spending control systems are also often a good idea. An internal
purchase order system, under which all spending above a set limit (say £20)
must be authorised by the person responsible for the finances, can be set
up easily. Most social enterprises require more than one signatory on all
cheques above a certain amount. These types of measures will also help
to inspire confidence in new-start organisations, as well as having clear
benefits to management.
The market, marketing and promotion
Before setting out on a new business venture, it is essential to understand
the market you will be operating in. This guide has attempted to identify the
key aspects of the waste and recycling services market common to the whole
of the UK, but obviously cannot address local variation. The most important
issues can only be uncovered by a market research exercise relating to a
specific location and business idea.
Tools and resources Marketing and promotion tips
Promoting your organisation will be an on-going activity, responsibility
for which should be designated to a specific person. They should be able
to speak and write clearly and convincingly about your enterprise and
generate a wide range of ideas to sustain public and media interest.
The different target audiences for your promotional work should be
identified clearly. Your key messages should be directed specifically to
them and delivered accurately, concisely and positively.