Top tips for community‑owned businesses applying to The Hive
My name is Petra Morris and I lead on the delivery of The Hive – a programme for co‑operatives run by Co‑operatives UK in partnership with The Co‑operative Bank.
We receive the highest volume of applications to Pathway 1 – which offers up to 10 days bespoke support for start-up or newly launched co‑op businesses working with one of our approved and experienced support providers, a mentor co‑op and/or a skills training practitioner.
The guidance for what The Hive will and won’t support was recently updated, so we wanted to share some tips on what makes a strong application…
Demonstrate your co‑op will be sustainable
The Hive receives many applications from communities wanting to save a local asset or service, or wanting to create new community‑owned business. Applications are most likely to be successful if they have demonstrated good business planning. You should demonstrate that:
- Your co‑op has a strong trading and viable business plan. We need to understand how you have tested your business idea and financial viability and that you can demonstrate that your product or service is needed. A co‑operative is a trading enterprise, you need to ensure that there is a viable trade involved. If all you are planning to do is campaign for a change, or own a community asset in trust and not actually deliver a product or service, then that's fine, but it's maybe not an enterprise. Equally, trading in order to create social change, or safeguard an asset, is fine too, but we do need to take the trading part seriously if it is to meet your other aims. View our business planning guides.
- You can finance your co‑operative. We need to understand how you are looking to finance your co‑operative. For example, how will you raise the funds to launch your co‑op? There are a range of options for co-operatives, which you can explore more in our finance section. Start up finance or seed funding could take the form of grants (Money that you don't need to repay, but normally do need to spend in accordance with the wishes of the funder or debt (Money that you do need to repay, normally with some interest). For groups that are a little more established and incorporated, crowdfunding using a ‘community share offer’ can be an option. It is always worth exploring whether a business can start without finance and expand slowly. For example Suma Wholefoods, a multi‑million pound turnover co‑operative began as a simple food co-op in a front room in Leeds. A market stall might allow you to test your idea before looking at taking on a shop.
- Your co‑ops has the ability to diversify income streams through providing a range of services. This is key factor in becoming financially sustainable and reducing reliance on grant funding. There are examples of community hubs and buildings which aim to be sustainable by providing services such as early years’ nurseries. They provide training and advice services, such as job seeker training, a credit union, small enterprise support, commissioned services around wellbeing or sell refurbished goods. There are lots of options and what works best will depend on your overall purpose, location and the community you are serving.
Demonstrate that there’s a need for your co‑operative
There are very few ideas that are truly unique and original – it’s possible, but unlikely. However, an idea might be innovative for your community. You could be providing services to your community that would otherwise not exist, or you are saving an asset that would otherwise be lost to the local community. So what can you do to make your application stand out? You should demonstrate that:
- You have tested your idea out. Demonstrate to us that thought has been put into the development of the idea. This doesn’t mean expensive consultants are needed, or even feasibility studies. If you are setting up a retail business, have a pop up store, market stall – show that people are prepared to purchase your goods. Evidence could include market research, feasibility study, community support and engagement (pledges, surveys), a prototype, or successful examples of a similar nature. View our business planning guides.
- Your co‑op has wider support, e.g. from the local community. Has evidence been gathered to prove there is a need and support for your co‑operative?
- Your co‑operative will have a social impact and that you’re demonstrating how co‑operative values and principles are being met.
Demonstrate you have a good team established
For community owned businesses serving their local community it’s important that your founding group, committee or board is representative of your community and that you have the necessary skills and experience to take things forward at the very least someone who understands finances, marketing and communications and legal aspects. If it’s a building and involves renovations, I know of some groups that have engineers and architects on their teams. It can sometimes be a long haul taking ownership, developing and running a share offer and you shouldn’t underestimate amount of energy and work required. In the early days this is all likely to involve volunteers so having a strong motivated and passionate team around you is vital.
Don’t feel like you’re quite ready yet?
If you've not done anything yet to test out your business idea and demonstrate there is a need and a viable business then you are probably not ready to apply to The Hive. We recommend you check out the getting started section. You might also benefit from attending one of our FREE ‘Is a co‑operative right for you?’ sessions.
If you are based in England, you may wish to take a look at the Bright Ideas programme which supports community business ideas at the very early stages.
Find out more about applying to The Hive – and make sure to read the application guidance first!