How to run a successful community business

Community groups can fill the gaps left by the public and private sector by building local homes, running pubs and maintaining transport links, according to a series of reports published today.

The reports by the National Centre for Social Research and WPI Economics were commissioned by the independent trust Power to Change, and look at how groups can run local assets.

They specifically examine how to successfully run community pubs, housing and transport systems.

Overall, the reports highlight the importance of having access to finance, committed volunteers and working in partnership with other organisations.

They also highlight the important of engaging with other members of the local community, which is ‘vital’ for such businesses to thrive.

‘Communities are increasingly proactive about taking on problems on their own doorstep,’ Power to Change’s head of research and policy, Ailbhe McNabola, said.

‘If the state or private businesses have stopped offering services, or if those services have seen much better days, local people will often be better placed than anyone to offer an alternative,’ she added.

‘That extends to local boozers, buses and bungalows. The idea of running your own community pub or transport service or even house-building project needn’t be that overwhelming. There is plenty of advice and support to help along the way.

‘And there doesn’t need to be a trade-off between doing good and making money – this research shows how community businesses can do both,’ said Ms Nabola.

The report on housing focuses on community land trusts (CLTs) as a specific model of community housing.

It claims that without an initial small grant, CLTs often find it difficult to establish or develop new housing projects.

Researchers also found that two key roles were important to a CLT’s success. The first was a project manager, which is important during the construction or renovation phase.

The second involves coordinating and increasing its membership base.

According to the report, having a member of staff responsible for generating awareness and support is ‘crucial’ as it can often take ‘significant periods of time’ to set up membership meetings and fundraising events.

The researchers also found that current housing legislation creates both ‘barriers and opportunities for success’, with several examples of CLTs using section 106 of the town and country planning act 1990 to support developments.

The report on community pubs also highlights the role they can play in helping to ‘increase a sense of belonging among residents’ and reducing social isolation.

It warns that while community pubs often rely on income from other activities, such as running a café, they can to some extent ‘generate their own demand’ by encouraging people to use the pub, rather than a commercial, profit-making enterprise.

Groups can also now use the localism act 2011 to set up community pubs by bidding for assets deemed to be of community value.

And the report on transport examines the growth of community transport organisations (CTOs), which they state can provide a ‘more passenger-oriented service to populations who may be otherwise underserved’.

It also found that successful CTOs ‘need to be able to adapt their business models’, depending on local needs.

‘This calls for innovation in meeting financial and social objectives and identifying opportunities in challenges,’ the report states.

It quotes the example of Cuckmere Community Bus (CCB), which runs eight 16-seater minibuses, operating on 25 local bus services seven days a week.

It serves older passengers in particular, on routes which had become too sparse and generated too little income for other providers.

By collecting feedback from local people, CCB has been able to adapt over the last four decades and shape its services to the needs of the community it serves.

According to the report, its income last year was just over £250,000.

The head of communities at the National Centre for Social Research, Matt Barnard, said the new research offers a ‘roadmap to setting up a successful community business’.

‘Four factors, in particular, are crucial – a solid business model based on local demand, partnerships with other like-minded organisations, a group of committed volunteers and a close working relationship the local authority,’ said Mr Barnard.

• Read Power To Change’s What Works reports here.