are community businesses starting to fail, or are we simply becoming more honest about the true nature of them..?

A few years ago, there was a jamboree around 'community businesses' - enterprises that are led by the community they're based in; operate and trade to meet the (social and health) needs of those local areas; and generally make that area a better place for everyone to live and work in it.

This was precipitated by the formation of Power to Change - a charitable trust whose remit is to nurture, encourage, and support the growth and impact of this sector of businesses.

Over the last 5 years since it's creation, Power to Change has initiated a range of programmes and support, which have, in turn (and to me at least), seemed to also catalyse a range of other good things starting to happen through other support bodies to the sector.

However, one of the things about Power to Change that's impressed me most, is its commitment to research, data, and openly sharing it's findings. I've drawn on some of these published findings in previous blog posts, in exploring what they can add to other researches and data from other bodies in seeking to better understand specific themes, but this time thought I'd look at their own data on the community businesses they exist to support, from a longitudinal perspective.

I've always thought that having more than a "this year vs. last year findings" is important in any context as it means you can better start to identify trends, blips, and other happenstance events (last time I did this it was on complaints received by the CIC Regulators against individual Community Interest Companies, the findings of which still cause shock amongst people I share it with...)

And when I look at the 4 years worth of 'State of the Community Business Market' reports that have been collated and published to date, I can't help but wonder if we shouldn't be making more noise about the general state of community businesses, and in particular, how the sector appears to be worsening...

As some who've read previous blogs of mine may recall, I don't claim that analyses like these are based on sophisticated or technical regression techniques and other sensitivity analyses in data sets, but merely what a regular lay-person might find if they were to apply some basic maths to the headline figures reported.

In this instance, I took the figures from the last 4 years of reports, and worked out the average (mean) figures of what a typical community business looks like from the headline figures in each - the charts highlight the story, but in summary:

1) there seems to be a general overall increase in the numbers of community businesses (up 2,000 over the last 4 years), but...

2) the average income of community businesses has fallen by nearly £20,000 (roughly 10%) over the same period;

3) the average value of assets they hold each has fallen by over £150,000 (roughly 60%);

4) they're employing 20% less people, and, before anyone points out that that's because they're making greater use of volunteers - the number of volunteers has also fallen too (by around 50%)...
5) they're also becoming more reliant upon grants over trading to help sustain themselves, and continue their activities into the future

Now, it may be that this is all easily explainable: in the reports themselves, Power to Change are very clear and open that each year the methodologies used to research and generate the data are changing - so there's a strong argument to debunk the above on the basis that I'm not comparing like-for-like. Except... for the figure about the overall number of community businesses which seems to be on an upward trend - if anything, this would suggest that the methodologies are actually getting more effective and precise in identifying and profiling community businesses. 

And if this is the case, then that surely means that a combination of things may be going on:

1) the strength and scope of community businesses, upon which national policy and investment programmes have been based, have been over-estimated, which means that the support now available isn't actually what's most needed...

2) Power to Change has been 'too successful' in inspiring a faster than historic growth in the sector of new community business start-ups, whose financial and operational standings will be far more immature (weaker) than their more established counterparts, and this is skewing the overall averages - although the age of community businesses isn't something that's closely monitored in these reports, parallel mapping by Social Enterprise UK highlights that most of the wider social enterprise sector (of which community businesses form a part), are disproportionately 'young' in comparison with private businesses).

So - all in all, a false alarm for community businesses after all?

Maybe, but as I pointed out earlier, I've done this rough analysis on the basis of how someone taking the headline figures from these annual reports might look at them (and perhaps be unwitting misled?)

And given that other national support initiatives, investment, support, and funding programmes usually take a year or two to 'roll out', in light of them being potentially based on flawed assumptions and data, will this mean that they 'miss their mark', unless they regularly pause to reflect on findings such as these about the wider sector that they're working in, and respond accordingly..?

what I did in 2018 that got me noticed (in trouble?) the most...

It's that time of the year when a lot of people are starting to share their retrospectives of the last 12 months - greatest hits type profiles of their biggest 'wins', most exciting adventure, and such like.

And it struck me that although I'm now entering my 14th year of being self-employed, I've never actually done one on myself. So, in the spirit of the season, and in keeping with the adage of "try everything once apart from morriss dancing* and incest", here goes:

As this is my first one, I thought I'd try and start with something relatively straightforward and simple - what did I write/post about over the year that caught people's interest and imagination the most?

As some may know, I don't place much stock in social media analytics, so don't have fancy dashboards that track my activity across all my social media channels (and there's rather a lot of it!). So what I've done in the 'keep in simple and quick/easy to start' philosophy is to use the dashboards that are built into my blog site, and on twitter, to try and spot which post on each got the most impressions (people coming across it and reading it), as this seems to me to be the 'right' count for the sake of consistency and continuity? 

But enough already, you cry! What's the result - what did I post about this year that got the most people talking, thinking, and otherwise pausing for a brief moment because it chimed with what they're thinking about or trying to work on more (cue drum roll...):

On my blog - it was my post reflecting on my latest social impact report on myself, and how I'm now aligning it to the UN's Global Development Goals:

https://thirdsectorexpert.blogspot.com/2018/05/how-social-impact-reports-sometimes.html

On twitter - it was celebrating my being named as the most innovative in the UK in developing new csr models: 

https://twitter.com/AdrianAshton2/status/1032656981620867078/photo/1 

At first glance, this might seem a bit narcissistic (something it's been suggested I am in the past by Liam Black), but I'd like to think there's something more encouraging to be taken from this - because to me, what ties both of these posts together is something about being a responsible business: not just in a 'tick box', "we'll help raise some money for a local charity" kind of way, but something deeper about how people are wanting businesses to keep stepping up to the mark and do the right thing by everyone (not just their owners).

This idea also fits with recent national surveys highlighting that public trust in businesses is at an all-time high, while it's at an all-time low in charities, and I'd rather not go into how people are feeling about the government...

So, 2018 - the year that businesses not only heard the rallying call to be the leaders and supporters of society and local communities that we the people are needing, but have also started to try and figure out how they best answer it..?

* sadly I recently came across a photo my mum took of me as a young child dressed in morris dancing attire, but I'm determined to never do a 'luke skywalker'...

6 hours, 5 people, a lot of coffee, and truffle honey.

A couple of years ago, I tried a networking experiment: booking myself to be in London for 48 hours, and asking people to invite me to meet them in places of their choosing. Lots of people engaged with it, and others followed the adventure on social media with interest.

And it got me thinking that I should try and do something like it again. But finding 48 hours in the midst of various client projects, and family responsibilities isn’t that easy… so I took the most of the opportunity of being in the capital to deliver a bookkeeping workshop for Unltd to come down a little earlier than I might have otherwise, and put word out that I’d be around for an afternoon (6 hours) to see what serendipity LinkedIN might magic up…

And what an enjoyable 6-hour stint it turned out to be:

• Discovering truffle honey with Martin Gilbraith, whilst reflecting on how MeetUp has facilitated UK facilitators to more easily network and support each other;

• Finally meeting Andrea Gamson properly in person (after we’ve missed each other at conferences ad festivals we’ve both spoken at in the past, had several phone calls, and generally stalked each other in social media over the years), and being confused for my namesake, Robert Ashton (although to be fair, our respective beads are probably quite similar to each others’ at the moment…)

• Learning of Roxanne Persaud’s muse, the Maid of Fail, and how a Phd thesis can become like Douglas Adam’s Hitchhiker’s Guide to the Galaxy;

• Receiving my first Christmas card of the year from Richard Hull, and over the magic of coffee, creating a new model and format for guest lectures on social enterprise and social entrepreneurship education (although we’ll have to wait until spring 2020 to release it on the world!)

• And finally, making an entrance with Eddie Capstick without having to enter the room (I phoned him from the other side of the window he was sitting in). But his choice of last venue came well equipped for his being the last name on my ‘dance card’ for this 6-hour speed networking dash around Kings Cross.

So – thank you all for the creativity, insight, new experiences, and shared laughs. Hopefully I can find an excuse to do it again before another whole year passes, and also not just in London…

too prudish or too offensive?

As a freelancer, I have a lot more freedom than my employed counterparts (something that I've used over the years to challenge and change national policy and legislation, openly argue with some of the direction that sector bodies suggest their members should be taking, and so on - in effect, being a 'modern day prophet').

But while this may sound quite exciting and glamorous, there is also an associated risk - in not being part of an ongoing team, having a line manager, and such like, there's a risk that I may start to believe my own hype, and end up 'going off on one'... which is something I've always sought to avoid through how I've designed part of my business model.

And this usually plays out ok - but sometimes it may mean that I go a step 'too far'.

I recently tweeted whilst on my way to deliver a workshop for a client that would be being attended by a range of people thinking about starting up their own business in the future. I glibly referred to the fact that I was looking forward to busting some of the myths and hype that surround business plans and included a picture of some of my 'learning aides' that any who's ever been in one of my courses will recognise.

For 14 years no-one has ever had an issue with any of these types of toys/gimmicks/props (with the exception of one person who suffered from the diagnosed medical condition pediophobia), but on this occasion, my client phoned me within minutes to ask me to delete it as they felt some people may find some of the content offensive.

Now - I'm not their employee, and neither did our contracted terms relate to anything which said they could direct what I could or couldn't say in my own right, so I could easily have said 'no'. 

But I've always had the approach that if someone's not happy with something that's happened, my first response isn't to find excuses or dodge potential blame, but rather find the quickest way to fix things so everyone can keep on getting along.

So I deleted it.

But, being me, I surreptitiously sought a view from the people attending the workshop about the items in the picture - asking if any of them were offended by any of them (some of which have also featured in national prime-time tv shows). They all said that they couldn't see any problem with any of them.

Which leaves me wondering - are clients sometimes too prudish in what they think others might think, rather than asking those same people, before acting on imagined fears; or am I starting to push the boundaries a little too far...?

(...and even though I've anonymised details so no-one will know who I'm referring to, will the client recognise themselves, and get even more upset with me?)

member only content

there seems to be an increasing trend on the internet towards content being hosted behind paywalls - the number of emails I now receive with links to research, features, and articles which are increasingly marked as 'member only content' when I try to read them, is starting to annoy me...

I fully appreciate that in an increasingly fragmented economy, people need to find novel and clever ways of being able to earn a living (or something approximating one), and so the potential to earn 'micro payments' of a few pence from people clicking to read your blog post or news feature may seem innocuous enough. But I'm concerned it may herald the dawn of a new net age of digital inequality - not from access to the technology which is the current digital divide, but from not being able to access information or learning when you do.

When the internet was created, it was intended to be as freely open and available to as many people as possible. A principle that chimes with the declaration of human rights, whose Article 26 states that everyone has the right to education [to be able to access learning], and that this should be free; and Article 27 which says that we should all be able to freely participate in the cultural life of our [on-line] community. 

If we start putting up charges to access content, then we start to limit the sharing our learning and experiences with each other - we start to segregate our communities into those who can afford to 'play with us' and those who can't. Which means that potentially increasingly large numbers of people will lose access to articles and research that could help to further understanding, constructively challenge prejudice and bias, and generally create a more consistent experience for us all on-line and in our lives.

I also appreciate the argument that we only truly value things we've paid for, but if the established norm in the marketplace of internet blogs and articles was that they were freely shared, then surely we need to be having a wider and deeper conversation about the effects that our use of 'member only content' may be creating in exacerbating inequality, stopping prejudice and bias from being able to be challenged as they could/should be, and generally increasingly p!ssing people off who are trying to contribute to the overall pool of knowledge and learning at the cost of our own time, in keeping with the original spirit of the internet, only to see others seemingly starting to exploit it for selfish gains...?

the danger of believing 'official statistics'...

Some of you may recall how I've argued in the past about how we should take the 'encouragements' and direction offered by our sector bodies with more than a generous handful of salt...

And I've based those arguments on where such bodies get their money from, and whom they're trying to curry favour with rather than asking us what their priorities should be; (don't believe me? Think back to the last time a sector body you're in membership of openly asked you what they should be doing on your behalf, openly published the results, and then reported on how far they'd delivered against those).

Some of you also know that I have a habit at looking at published research and data - not as a trained mathematical/economic analyst, but rather as an 'enthusiastic amateur', to see what new (or contradictory) stories they might offer to help us better understand ourselves and the issues we face.

And my latest 'rummaging' concerns the NCVO's Almanac and Social Enterprise UK's 'State of the Sector' survey. And the reason for picking these two august bodies? I'm refreshing some of the training courses and materials I deliver around governance in the sector, and though it might be interesting to see what both sources have to say about latest trends (as they both map legal forms adopted in the sector, and both published their current findings for the same year: 2017).

As with all surveys from different bodies, they've framed and categorised data relating to the same question against a range of different options and headings, but with a bit of rough transposition on my part, what seems to emerge is a picture of some confusion:

Quite some difference.

But so what you might say (and perhaps rightly so) - NCVO is concerned with those organisations who are predominately volunteer dependent (hence the title), whereas SEUK is concerned with enterprises that are trading - so we'd expect to see a difference, right?

Well, here's why I think this is more of an issue for us than we might think it is:

1) Policy makers, funders, and commissioners all group charities and social enterprises together into a single pot (hence the term 'civil society'). 

They don't differentiate in the way that our sector bodies do, so when they come to make policy and pass legislation that will affect us, how can we have confidence they're making the right choices when the data we're presenting them with to do so appears to be so contradictory?

2) Where the data comes from. 

NCVO's Almanac draws upon several external, objective, and credited sources, so should be pretty sound. SEUK's data is largely a collation of the returns they've received to a call for survey responses from groups in the sector - so their data is only as good as the people who fill out the forms. And that could be more of a problem than we'd like to admit: as a result they list sole traders as recognised legal types of social enterprise in their report (not sure anyone else would?), and 6% of all the CICs who responded weren't able to identify or be categorised as to whether they have share capital or not which, when added together with the other 'uncertain' responses, shows that over 10% of all respondents whose data has been collated and published as reflecting the realities of the sector today don't know what their legal form is - so how can we trust that they'll be any more accurate in other data that they give?

Let me put this another way - if we were building a house wouldn't we want to have confidence in the nature of the foundations, and that the way they'd been created would subsequently stand up to scrutiny from a variety of inspectors and other builders to ensure that what we're building doesn't come crashing down around us in the future when the weather gets rough..? 

If the data we use to act as the comparable 'bedrock' in shaping support, interventions, and lobbying for the sector is found to be suspect in the future, isn't there therefore a risk that a lot of efforts now would be wasted, hence why it's important to make sure we test such data today..?

As with any mapping exercise, there will always be ways in which the methodologies used, and the way the analysis on data captured can be criticised. My reason for doing so here isn't to belittle or reduce the efforts of these 2 bodies, but rather encourage us to pause before citing an 'official statistic' about our sector to make sure that we can be confident that it really is accurate, and in everyone's best interests to be using for the reasons we are.



UPDATE - 19 Sept 2018

There's been some new mapping research published today by Social Enterprise UK that seems to have picked up on some of these 'vagaries' I've outlined, and offers a more robust methodology in starting to scope the true shape and size of the social enterprise sector: https://www.socialenterprise.org.uk/the-hidden-revolution

Also, there's been some good debate and rebuttals and cross-rebuttals over on LinkedIn that you may also want to check out (including from the ex-deputy chief exec at Social Enterprise UK!): https://www.linkedin.com/feed/update/urn:li:activity:6447793971262418944

what I'm doing to help fix a £14.9bn problem that's killing our economy...

There's a problem in the wider business community that's affecting everyone (and our livelihoods), and it's getting worse every year.

It's a problem that people struggle to feel able to talk about or openly challenge.

And it's a problem that's increasing the risk of pushing us back into recession, and leading to further business closures and job losses than we're already seeing and hearing about in the media.

And it's not red tape or (mental) health - it's money. More specifically, the challenge of late payment: customers who commission us to deliver work and goods for them, and then suddenly get out the big book of excuses when it comes to paying us what was agreed, so that they can hold onto the money that's rightly ours for longer.

It disproportionately hits small businesses and the self employed like me, as we don't have big financial reserves to cash flow the work, or employ finance teams who can chase up the money on our behalf (we have to take time out of earning from other work to do that ourselves). We also can't easily use the courts to chase the money, as that costs more cash and time to pursue, and also risks damaging our public reputation.

Late payment is also stifling the wider economy - most small businesses now don't feel that they can raise the money they need to invest in their growth and maintaining their competitiveness because late payment is causing problems for their cash-flow (which makes it harder to repay any loans), and they're having to take out more time to chase customers, rather than deliver more paying work elsewhere (further reducing their cash in, and profitability). And such declines in economic activity, production, and employment are often cited as causes of recession...

And when the cash runs out for us because we've not been paid the money we're owed - it's game over. Our enterprises fold, and we lose our livelihoods along with anyone we're employing. And for what reason? So that some larger corporate can hold onto the cash (which they already have plenty of) for a little longer.

Sadly it's not just big bad private businesses who are guilty of this. Government and the public sector are amongst amongst the worst offenders for not paying on time; and some of my work with charities and social enterprises has also seen this sector being guilty of not paying when bills fall due as well...

It's currently a £14.9bn problem, with the typical small business owed £11,000 and spending nearly a day a week trying to get the money paid that they're owed.

£14.9bn seems an overwhelming amount that nothing can surely be done about. Government have created a post of late payment commissioner to help change this culture, but they've had little (if any?) impact.

So what can a sole trader like me do about it? Well, I can make a pubic commitment to always and openly paying my suppliers on time (if not early) through being certified as a 'Pay On Time' supporter.

I can constructively challenge customers and clients who start to drag their feet in paying me what they owe me for my efforts on their behalf by using the Late Payment Act legislation (very easy and surprisingly effective!).

And I can do this openly and in a way that hopefully encourages others to start to do the same - and if you're reading this, that that means I'm challenging you to do the same!

Government have shown that they can't fix this problem, but the tools are there for us if we have the conviction, leadership, and resolve to get the job done ourselves. 

Who's with me?