Q: My enterprise will be trading across the whole of the UK. Is this eligible? There are no geographical restrictions on trading. However, as Start It is funded by the Scottish Government, the majority of the social impact must be delivered in Scotland. This means that the majority of people who will benefit from the […]
Q: My enterprise will be trading across the whole of the UK. Is this eligible?
There are no geographical restrictions on trading. However, as Start It is funded by the Scottish Government, the majority of the social impact must be delivered in Scotland. This means that the majority of people who will benefit from the good work of the enterprise must live in Scotland.
Q: I’ve run an income-generating pilot – does this count as trading?
If you have already conducted brief activity to test the market for your idea, but are not regularly trading (e.g. you may have run a pop-up stall, or a trial workshop), then your idea is still likely to be eligible for Start It funding, and the results of this activity could in fact strengthen your application. However, if you have been regularly trading for some time, and this is ongoing at the point you apply, it is more likely that you have moved past the early stage that Start It funding supports. In this case, you should contact us for further advice on the other support we can offer for later stage enterprises.
Q: I’ve already set up as a sole trader/private company limited by shares. Am I ineligible for funding?
Firstport funds individuals as opposed to organisations, so you can still apply whether or not you have set up a legal entity for your project, and regardless of the type of entity you have chosen. However, at assessment, we will want to know why you have chosen to go down a particular route, and whether you are committed to sticking with it.
Setting up as a sole trader or private company limited by shares is more common in traditional commercial organisations as both of these models allow profits and assets to be paid out of the business to private individuals or bodies. A key feature of a social enterprise is that it does not allow this, and instead reinvests profits back into achieving its social aims. Even if it needs to close down, any remaining assets (after debts are paid) must be passed on to another social enterprise or charitable organisation – usually with similar aims. This feature is usually reflected in its choice of legal model.
If it is important to you that your organisation can continue to distribute profits or assets, then your idea is unlikely to receive Start It funding and we would be more likely to point you towards support on setting up a standard commercial business. Firstport’s sister company, FirstImpact, may be able to provide support if this is the case.
However, we are aware that many new social entrepreneurs initially register as sole traders or private companies limited by shares for other reasons – perhaps this is the model that seems easiest, or most familiar – or they want to claim their social enterprise name. If this is the case, but you are committed to setting up a social enterprise, we can help provide guidance on changing to a more appropriate model (and may even be able to fund costs associated with this if your application is successful). In such cases, an offer of funding might be conditional on you making this change.
In any event, we would always strongly encourage applicants to base their choice of legal structure on what is best for the business, as opposed to being influenced by eligibility criteria for any particular funding stream – via Firstport or any other source. Please contact us if you would like further advice on this subject.
Q: My enterprise is a trading arm of an established charity/organisation. Is this eligible?
No. At Start It, we focus on supporting individuals to start up new, independent projects, and who don’t have the backing of an existing parent organisation behind them. In cases where an idea has originated as a project of an existing organisation, but you want to develop this as an entirely new enterprise in its own right, we will want to see evidence that it is fully independent and separate from the original organisation.
Q: What is ‘direct social benefit’?
When a social enterprise carries out work or provides services itself for the good of its beneficiaries (this could be individuals, a community, or even the environment) we define this as ‘direct social benefit’. On the other hand, when a social enterprise provides services to other organisations, who then go on to do the work with beneficiaries, this would be defined as ‘indirect social benefit’.
For example: an enterprise providing counselling services to a vulnerable group would be seen as direct social benefit; an enterprise providing counselling training to a charity who then provides this counselling to their beneficiaries would be seen as indirect social benefit.
Q: What type of enterprise typically requires premises to start trading?
Most bricks-and-mortar retail enterprises, community cafés, or any community-focused enterprise which requires a permanent base of operations as part of their commercial/social strategy.
Q: I have identified a suitable property, but I haven’t approached the owner as yet. Does this count as an agreement in principle?
No. You must be able to confirm that the property is available and that the landlord/agency has agreed in principle to lease the property to you, and provide us with details of any costs associated with leasing the property (deposit, rent etc.).
Q: I haven’t chosen a legal structure for the enterprise yet. Do I still need to put in legal/incorporation fees in the request?
You don’t necessarily need to know which legal structure you want to go for at this stage, but there should still be an intention to incorporate at some point within the span of the award. It is up to you whether you seek professional advice to help you with this, and whether you want to apply for funding to cover this cost.
Q: I need to pay someone to design my website/branding – does this count as wages?
No, unless you would be looking to contract that person as an employee. Paying someone to provide services to the enterprise – such as design – would be eligible. Paying someone to work for the enterprise and help deliver its services would not.
Q: I have already set up the social enterprise and all I need is equipment. Will this be eligible?
Some social enterprises have already sourced start-up funds from elsewhere (which should be detailed in the ‘Other Sources’ space) but have a larger initial funding requirement. As per the eligible costs above, we will assess this on a case-by-case basis.
Q: If I submit a budget and need to change it at a later date, is that possible?
We understand that requirements may change between the submission of the application and the assessment, so there will be opportunities to amend your budget later.