Really trading on your strengths

The social enterprise was already working internationally to provide wheelchairs and related services to people with restricted mobility in less resourced parts of the world.  We helped redefine their business model.  A new deal involved moving manufacturing of wheelchairs to the far-east.  Selling started to International NGOs, flat-packed.  By working closely with the management team, we were able to set appropriate gross and net margin targets.  The aim was that sufficient returns could be generated to deliver surplues within the trading operation that could be gifted back to the parent charity.  This would help grow international development capacity.  We sourced investment funding to cove the necessary set up and working capital cost, and helped develop the reporting systems and governance to enable the operation to grow.  

In failure there is always learning

A social enterprise working with families had a  business model fundamentally dependent on an area of activity that was becoming less attractive in the market place.  They needed a radical overhaul in order to turn things around. Unfortunately as well as the difficult market position, they also had weak management which had lead to a failure of their internal control systems. This meant that they failed to see how quickly they were moving towards an unsustainable position. Having realized the issues that they faced, they used our investment readiness process to re-assess the operating model and look at new income streams. However, things had gone too far and the organization ended up fire fighting most of the time. When a further major piece of business was lost because they had not focused on project outcomes, they had to seek a merger partner.  Even though they had ideas for new developments they could not be implemented quickly enough. Seeing such potential unravel this way is one of the reasons why Radical Capital now focuses on the often hidden challenge of improving corporate governance and leadership of social enterprises so that they can analyse their risks accurately and lead the business effectively.  

Commissioning can stimulate innovation

A commissioning team with only a three-year budget for a long-term service developed a joint venture with a social enterprise using a competitive dialogue process for the procurement. This enabled the commissioner to choose a strategic partner in the market place and design not just a service, but also a profitable business model to help deliver the service long-term and have a wider impact in the market.  Matching the risk taking and financial investment of the social enterprise the commissioner used the budget available to create a loan for three years growth, and paid back over six. The joint-venture is delivering a quality service, has already saved two authorities millions, which they have cashed.  The loans are being repaid and the growth is on track to make profits a proportion of which will create a new budget for preventative service developments in linked areas of work. Social entrepreneurship and social intrapreneurship make a great match.  Radical Capital designs learning programmes to network this together to create powerful market shaping forces and new locally owned examples of best practice. These are replicated more easily and empower the people and professionals involved. 

Always negotiating the best deal

An established provider of services was responding to downward pressures on its prices by the local authority, struggling to respond to the escalating costs of social services.  Seeking to get ahead of the game, the charity used the investment readiness process to really understand their business and produce robust financial models.  Internally they could use this to decide where to grow the organisation strategically, what markets existed or could be shaped to create new income and build a more independent business.  Externally they were able to build confidence in their own understanding of their business and the market and renegotiate prices with the local authority at a time when competitors believed their was no alternative to but take what was offered.  Being investment ready, developing good governance and understanding market shaping, is not just about fundraising or investment.  It is also a level of business confidence and competencies that enable you to coproduce better solutions with your partners, empowering them is too your advantage.  

It is always personal

Negotiating the deal with an investor or collaboration partner will always be a meeting of minds - it is about people doing business together.  Our value helps to remove uncertainty and improve confidence so that the right people come together.  Integral to the capacity building effect on the whole organisation is the personal development of senior leadership.  This is often a reflection point for the CEO and directors like in this case, recent feedback from a client.  

"For me one of the excellent outcomes is that the trustees have changed their perception of me. They have more confidence that I can both take the organisation forward and bring in the help I need to do that. Becoming an entrepreneur is a fascinating journey. You have really opened my eyes to exciting possibilities. Being part of this process means that we have been able to work together on related matters, putting them into a different perspective.  If we hadn't been working together I believe part of that would have ended up a disaster, rather than a learning experience."