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How to get started with commercial trading

In light of various funding challenges many charities are considering different ways of generating extra income to support their valuable services. For many this could be looking at some form of commercial trading; from charity shops to signposting to manufacturing. This how to guide takes you through some key steps to explore this further.


Is commercial trading definitely right for you?

The first step is a critical one. Your Board of Directors/Trustees and the Senior Staff need to be certain that the whole concept of commercial trading fits within your charity's value base. The answer could be a nice easy yes, or it could be that some types of commercial trading would suit, such as signposting to reputable services, whereas other forms of trading would be an uncomfortable fit for your organisation. This is really important as the activity that you are undertaking needs to make sense to not only your supporters and service users, but also your staff teams. Most forms of commercial trading work best with employee advocacy behind them so it is vital that the activity not only generates income, but also complements the work of the organisation.


Pin down what you want to gain from commercial trading or signposting.

Assuming that you've got passed step 1, the next thing to do is to identify what you want to gain from commercial trading. Is it purely for income generation? Do you want to increase the number of services that you are able to offer service users or clients? Or is it a mixture of both. This step links closely to step 1, by identifying the purpose of the activity up front, it will be much easier to communicate the benefits of undertaking this new project to staff, service users and supporters alike.


What products or services do you want to offer and how do you want to offer them?

There are some key questions to ask yourself when determining what it is you want to offer:

- Is it a product or service that the organisation wants to manufacture/deliver itself?

- Do you need to partner with another organisation to deliver this?

- How much resource (both time and money) can you commit to setting up and running this venture?

The third question on this list is actually the most likely to determine the answer to the first two. If the resource available is minimal it is probable that you would need to work with partners in order to deliver the activity. It could well be that the charitable activities that you undertake already produce a product, hence taking these to market may be a natural step.

Depending on the route that you choose the importance of a valid business case and plan will have varying levels of significance.


Who do you want to work with?

At some point within your trading activity you will need to work with other organisations, even if delivering on your own. This could be as suppliers, provider partners or customers that you need to engage with.

Linking again into step 1, you may need the organisations that you work with to meet certain requirements in order to fit with your charitable ethos and mission. Don't be afraid to bring these up at the outset; this is a critical part of your relationship and will be very important when communicating with supporters, service users and staff. They will not only need reassurance that you are doing this activity for the right reasons, but also that you are doing it in the right way that isn't detrimental to the charity.

As part of this, undertaking due diligence on any providers or suppliers will be essential. You will need to demonstrate that not only are you working with reputable organisations, but that you have the evidence to back this up.


Do they want to work with you?

For any partnerships to be successful in the long term they need to work for all parties. It may well be that some potential partners that you are talking to are unable to meet your requirements. On some areas you may be able to negotiate, but don't do this to the detriment of your ethos or aims. It may well be that it is not possible to work together for the benefit of both organisations so sometimes you may just need to thank them for their time in exploring the opportunity and walk away. It is better to do this before a relationship starts than half way through!


Launch/go live.

Obviously there will be an amount of preparation work to do before this point and depending on your activity this could be minimal or substantial. You may decide to do a soft launch or go all for it with a bang! Remember that any associated costs need to be considered carefully; and don't forget to review your existing communication activities, it may well be that the new project can be easily promoted within your existing materials or activities.


Lastly, review review review and if in any doubt review again!

Any new activity is likely to have teething problems, regular reviews will enable you to take any necessary action as soon as possible. After this it is vital to keep reviewing both your business plan and any partnerships that you may have. You may need to keep an eye on pricing, customer feedback, industry activity; the list could go on depending on what you are doing. The due diligence that you will have completed will stand you in good stead, but organisations can change and through reviewing regularly you ensure that quality is maintained and any potential issues are identified quickly and any action required is completed in a timely fashion.

Following the success of your commercial trading activity, don't forget to measure the difference that it has made to your charity and its services. Measurement can be time-consuming, but if you can do some form of measurement as to the extra impact that your project has had this will again help with communications and advocacy in the future. it can also be used as a fantastic promotional tool!

One last thing: Good Luck!

Further information

Jenni Buckland is Chief Operating Officer of advant~age. advant~age is a national social enterprise that enables charities all over England and Wales to help vulnerable people, their families & carers and supporters obtain access to safe and reputable products and services, whilst at the same time generating valuable unrestricted income for the charity and minimising reputational risk.

Contact: or visit for more details.


Page last edited Jul 10, 2017 History

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