Social Investment Scotland Chief Development Officer Roger Moors takes a look at what it really means to be investment ready
For organisations thinking about securing social investment, the term being investment ready is one they may come across at some point. This simply refers to whether that social enterprise or charity has the scope and ability to both use and manage investment effectively. But what does it really mean, in practical terms, to be investment ready?
Social Investment Scotland (SIS) are Scotland’s largest provider of social investment to charities, social enterprises and community organisations. Over the last fifteen years we’ve invested over £53m into the sector, in organisations that have gone on to deliver all kinds of wonderful social and environmental impacts. However, we often see entrepreneurs and organisations who are highly motivated to make a difference in society but need support to develop their business proposals to the point where they can secure investment. Across Scotland there are a range of support organisations who can help including Firstport and Just Enterprise in addition to ourselves, and we all focus to a greater or lesser degree on addressing the three fundamental issues of the Will, Skill and Bill issue.
Will is about the entrepreneur (and their board) coming to terms with the ideological shift away from grant dependency and embracing investment as an opportunity to grow their business in ways best suited to their organisation. Grants can often be restrictive in the way they’re used and an entrepreneur can easily fall into the trap of delivering the funder’s social aims rather than their own.
Skill is about having the capacity and know-how to effectively utilise social investment and then manage it thereafter. So here we’re talking about skills such as budgeting and cash flow forecasting together with the knowledge about how money works.
Finally, bill simply refers to having a sustainable business that underpins the organisation and a product or service that you’re able to send an invoice out for (hence the bill). Knowing who your customers are, what they’re going to purchase and when, how often and for how much are questions that any investor will want answered before parting with their money.
Taking on repayment investment is about being able to build a sustainable and profitable business that can generate a surplus to both develop the organisation and repay the loan. Investment can be the enabler to the purchase assets and aid cash flow, but it’s also crucial that any organisation doing so is prepared and capable to embrace the opportunity.
If you’re thinking of accessing social investment in 2017, you might find that the first step on that journey is best served by attending one of eight Scottish Government supported introductory workshops hosted by SIS and planned for February/March. These day-long events will examine Will, Skill and Bill in more detail followed by an afternoon session looking at the practical steps of accessing investment.
Next month, we take a look at social impact and how it plays a crucial role in securing investment.
If you have questions or would like to express interest in attending one of the events, get in touch on 0131 558 7706 or [email protected]
