BAY Business News
The world of business structures is constantly evolving, leading from Public Limited Companies (plc), private limited companies (Ltd), partnerships, sole traders and the recently developed Limited Liability Partnerships (LLP), usually professional practices like law firms – to the very latest phenomenon, the Co-operative Business.
Starting off with well-known brands such as the Coop Bank, and John Lewis Department Store, the cooperative business structure has become increasingly popular with the small business sector, particularly today when a community unites to save a pub, village store or public amenity (like a Leisure Centre or a Library), using the cooperative format to invest jointly in a business which is no longer financially viable in its existing form.
SARLA LANGDON talks to Sarah Owens and David Madge from the Wales Cooperative Centre to take a closer look at the growth of this groundbreaking method of making business a part of the community.
When the decision to close five Remploy factories in Wales was taken in 2012, one group of employ-ees in Swansea decided to use their redundancy payments to create a new business. Kevin Edwards and six of his colleagues decided to set up Accommodation Furniture Solutions (AFS Ltd) in the old Swansea Remploy premises. The new owner-directors set up their business as a worker co-operative, ensuring that each member has an equal share of ownership in the business and a say in how it is run. AFS Ltd is an example of a social business: a sustainable business which has social aims.
NEW Support on offer for Social Businesses in Wales
The Swansea factory that had once employed up to 50 people is now run by a business with very clear aims which include training and employing people with disabilities from the local area. Although AFS Ltd can’t yet match the original Remploy employment levels, the business has proven successful. Now in its second full year, it can boast an increase in turnover and employs over twenty employees who have experienced a disability.
The Wales Co-operative Centre recently launched a new Welsh Government and European Regional Development funded project to support social business growth. ‘Social Business Wales’ was launched at the Digital Accessibility Centre, a successful social enterprise based in Llandarcy. Social Business Wales will provide extensive support to viable social businesses which have growth potential. It is part of the Business Wales family which offers support and advice to Welsh businesses.
The Digital Accessibility Centre was chosen for the launch as it is an ambitious social business which is keen to grow. The business works with its clients to create digital media that is accessible to all members of the public, and meets best practice accessibility standards and legislation. The Digital Accessibility Centre has an extensive client list which includes British Telecom, Fujitsu and Channel 4.
SARLA: So, what is a social business?
Social businesses are defined by their specific social aims. Frequently they have a high degree of ownership or involvement from the people they serve. The Social Business Wales project defines social businesses as co-operatives, mutuals, social enterprises and employee-owned businesses. Social businesses usually have aims and objectives beyond simply making money; but of course, they must do that too.
SARLA: Who benefits from social businesses?
Social businesses are often formed around an identified service need in a community or market. It could be a need to help older home-owners and private tenants to repair and maintain their homes similar to the service provided by social business Care and Repair Services in Swansea. Or, like Cyfle I Dyfu (Chance to Grow) social businesses can form to support people with a history of substance abuse to help them back into the work force. Social businesses also respond to sports and leisure needs. Swansea Tennis Centre is an example of an extremely successful social enterprise formed by a community group that wanted to ensure top quality tennis coaching and facilities were widely available to everyone, in Swansea. Now, it is one of the best performing indoor tennis centres in Britain.
SARLA: Why are social businesses important?
Social businesses have specific social aims to fulfil but they are also important sources of employment in the Welsh economy. A recent report estimated that the total value of the social business sector in Wales as £1.7billion. The report, ‘Social Business in Wales: State of the Sector’, maintains that the sector employs 38,000 people and provides volunteering opportunities for a similar number. Social businesses often grow in areas and sectors where private sector businesses won’t invest and local authorities aren’t able to provide services. Social businesses enhance people’s lives on a regular basis.
SARLA: What is Social Business Wales?
Social Business Wales is a new project which aims to support social businesses that have the potential to grow. Although the sector already makes a large contribution to the Welsh economy, it has the potential to deliver more. The new project will support existing social businesses to expand and diversify and to work together to access public sector procurement and to collaborate to promote their products and services. For existing businesses looking to transform into an employee owned business (often as part of succession planning), there is support available to help them implement that process.
SARLA: Who can apply for support?
Existing social businesses can apply. They must be viable and sustainable businesses that have realistic growth or collaboration plans. Small and medium sized enterprises can also be supported to develop consortia and to develop employee ownership.
For people and organisations considering setting up a social business there is extensive online support available at www.business.wales.gov.uk/socialbusinesswales. The Welsh Government website offers excellent information as well as useful templates for starting and running social businesses.
SARLA: How can I contact Social Business Wales?
Social Business Wales is managed by the Wales Co-operative Centre. The business advisory team can be contacted via its website www.walescooperative.org or by calling 0300 111 5050.