Finance

Financing a start-up can be a challenging and time consuming process especially when seeking cost effective forms of funding such as grants. Work For All is a social enterprise which gives us an edge in attracting grant funding and other investors. Nevertheless, we were aware that financing the initial startup costs would be an issue. For this reason we are aiming to maximise our use of bootstrapping and contacts to reduce the financial outlay required as much as possible.

The Work For All team have contacts within Universities in both Australia and Scotland. We are able to use these to build the core application that will run on the smartphones of mental illness sufferers. In this way, the app would be built as a part of a computing science student project. Given the building of the app would form an assessment and a part of education we would be able to develop the application with limited costs. The only significant costs arising from the app is in the maintenance, training and upgrading processes.

Within the UK, grant funding is on the decline as the Government aims to promote sustainability in the social enterprise sector whereby the enterprises must either support themselves or employ borrowing instead. (Brown 2006, p.73) This is a trend which is being replicated across the developed world. This means that we have to consider other options such as equity financing, bank loans or other less traditional means such as crowdfunding. Given our contacts a bank loan would be easiest to acquire however it is also a very costly from of borrowing. Given our low start-up costs we are hopeful that we will have no need to attract any external funding and if we do, it will only be acquired if it is critical to the success of Work For All.

To summarise, the funding scene for social enterprises has been changing in recent years and our strategy aims to reflect this. We will utilise bootstrapping to cover the initial start-up costs from which we expect the enterprise to be financially sustainable.

Gavin

References:

Brown, J., 2006. Equity finance for social enterprises. Social Enterprise Journal, 2(1), pp.73-81