Why a Not for Profit needs to be Profitable!

Profit is not always purely financial; it can be measured as an advantage or benefit derived from an activity. In particular for charities or social enterprises who will measure their success in many other ways.

Every week we talk to many coffee shops and Cafe from different sectors, including the not for profit & charity sector.

We come across more and more charities, social enterprises and churches who know that by providing a coffee shop or cafe, their overall impact can be enhanced.

Some offer it as a service to the community, ensuring that even the poorest have a good meal, there are some that provide a place of safety and security and serve a population that would otherwise have to travel many miles. For others they use it to employ or train the vulnerable in society, often it’s a combination of one or more of these reasons. There are even some that see it as a fantastic way to generate cash to support their other work.

Often they have guiding principles that are the foundation for what they do, however, although their aims and reason for being are often distinct from a commercial operation, the fundamentals are virtually the same.

You see even a charity or not for profit needs to make some profit to survive. They need to make a contribution to the rest of the organisation rather than be a drain on it; they need to refurbish and refit the operation every few years as well.

The challenges we find when we meet them are similar to the coffee shop or cafe in the commercial arena. The difference is often because the set up of the organisation is via committee decisions, taking a little longer to percolate through, which can be frustrating to those at the operational end.

It’s about staffing, ranging, pricing, margins, controls, training, menus, operations, marketing, etc…… However, their founding principles have an impact on more than a few of these variables and are always something we spend time understanding before offering advice to the best way forward for them.

In fact, we find ourselves examining their founding principles and reason for existence and reminding them of why they are doing what they are doing in the first place. When we do this exercise and spend time communicating this to the teams running the day to day operation it often helps to refocus the efforts and thus makes taking decisions easier.

The measures of success for these not for profit or community-based ventures vary, but they need to be measured against the set targets to understand the impact they are having on their local community.

For instance, if a cafe that is set up to provide the poorest with a good meal and a place of safety, only has a few customers a day, then neither objectives will have been fulfilled.
If a community shop is not supported by their locals, it may as well not be in existence.

So it’s just as important for organisations in this sector to have an appealing offer because they want many people to benefit from them being there.

If you are involved with a charity, community or social enterprise, or knows an organisation who could benefit from our experience in this sector then share it with them or get in touch.

We will bring you some clarity and help maximise the benefits you offer.