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Crunch time: Accelerator and investment program for social enterprises
Social enterprises seeking training and investment can now apply for a six-month accelerator called The Crunch.
The six-month incubation program is focused on developing the skills and business plans of start-up founders. The program also equips the founders to seek and secure investment to get their ideas off the ground and trading within 12 months.
The program is coordinated by Social Traders, a not-for-profit group that runs courses and support services to encourage commercially viable social enterprises.
David Brookes, the managing director of Social Traders, told StartupSmart start-ups had similar needs regardless of if they were a business or a social enterprise.
“A social enterprise is fundamentally a business, so they have similar requirements and challenges to business. Funding is often a prerequisite, but our experience is standard, commercial forms of finance can be out of reach for social enterprises and a more patient form of capital required to get these groups off the ground,” Brookes says.
Brookes says the funding is usually a blended or hybrid model that combines repayable loans with donations.
Sixteen places are available this year. This is double the amount of places available last year.
According to Brookes, many aspiring social entrepreneurs underestimate the importance of developing a solid business plan and sustainable revenue models.
“We’re looking for good ideas with market potential, and the reason for that is over time the majority of revenue for the enterprise has to come from the market, from the trade of its products and services. We need to be confident the idea has potential to be commercially viable without ongoing reliance on government and philanthropic grants,” Brookes says.
While successful applicants don’t need to have developed business plans, they need to be passionate about a strong idea with significant social, cultural or environmental benefits that fills a market gap or need.
“This is for start-up ideas. You may have done some initial concept development and initial market research and testing. But the idea itself needs to be developed,” Brookes says.
“Often the people we have applying will have not had experience developing a business plan before, so we help them develop that.”
Brookes says social enterprises needed to recognise the commercial challenges their idea may have.
“A lot of people are keen to set up cafés, but while it sounds easy, it’s very hard to make them viable over the long term,” Brookes says. “We’re looking for really innovative and creative business ideas with social good at the core.”
Graduates include 100 Story Building, which runs workshops for marginalised children and young people to develop literacy skills, and CoDesign Studio, a social inclusion and urban revitalisation group that works with communities to improve their local area.
The founder of 100 Story Building, Lachlann Carter, describes the program as a game changer.
“We realised that the business plan we had in mind was not an economical business model and The Crunch enabled us to do the market research to get on the right track,” Carter says.
This is the third time the program has been run, and 11 graduates are now trading. These groups have received over $2 million of investment.
Applications close October 4, 2013.