Setting up a Community Interest Company (CIC) can seem daunting, especially if you’re starting without any funds. However, with the right approach and understanding of the process, you can navigate this journey successfully. In this blog post, we will explore how to establish a CIC with minimal investment, ways to secure grant funding quickly, and essential budgeting tips to ensure you cover all your startup costs.
Understanding the Basics of a Community Interest Company
A Community Interest Company is a special type of non-charitable company designed to benefit the community. Unlike traditional companies that aim to generate profit for shareholders, CICs focus on delivering social impact. The beauty of a CIC lies in its flexibility; it allows you to operate a business while ensuring that profits are reinvested into the community.
Setting Up Your CIC: The Initial Steps
When you’re ready to set up your CIC, the first step is to register it with Companies House. The registration fee is only £27, which can be paid online via PayPal. This is a minimal cost compared to starting a traditional business, making it accessible for many aspiring social entrepreneurs.
Free Resources to Get Started
While waiting for funding, there are several steps you can take without spending money. One important action is to establish your online presence through social media. Platforms like Instagram, Facebook, and even TikTok can help you connect with your future audience and potential funders. Remember, grant funders often check social media to gauge your community engagement.
- Social Media Setup: Use platforms like Canva to create professional-looking posts that represent your CIC.
- Volunteer Time: Engage with your community by volunteering your time to build connections and gather feedback.
- Application Writing: Learn to write your own grant applications to save on costs associated with professional bid writers.
Building Your Network
Networking is crucial when starting a CIC. Reach out to local organisations, community groups, and potential partners to share your vision. This engagement will not only help you gather support but also provide valuable insights into the needs of the community. Through these conversations, you can identify potential collaborators and allies in your mission.
Writing Grant Applications
To register your CIC, you will need several documents, including:
- A community interest statement outlining your objectives and how they benefit the community.
- Articles of association that govern the internal management of your CIC.
- A business plan detailing your activities, funding strategies, and projected impact.
Utilising Personal Access Costs
If you face challenges such as dyslexia or other barriers to writing, some grant funders, like the Arts Council, cover personal access costs. This can allow you to get professional assistance without incurring expenses. Always check if other funders offer similar support, as it can be a game-changer for your application process.
How Soon Can You Secure Funding?
The timeline for receiving grant funding can vary, but many have reported securing their first grants within six to eight weeks after completing a focused course on grant applications. The key is to apply strategically to the right funders. Arts Council and Sports England can be less competitive compared to broader funds like the National Lottery, so consider targeting them first.
Budgeting for Your CIC
Creating a detailed and accurate budget is critical when applying for grants. Funders want to see that you have thoroughly considered your expenses and that you’re not guessing amounts. Here are essential components to include in your budget:
- Insurance: Ensure you budget for public liability insurance and directors’ insurance.
- Website Costs: A professional website enhances credibility; platforms like Wix offer affordable options.
- Operational Costs: Account for materials, venue rentals, and any other essentials required for your project.
- Training and DBS Checks: If you work with vulnerable populations, include costs for necessary training and checks.
Assets and Equipment
When it comes to acquiring assets, grant funders generally prefer that you hire rather than purchase equipment. This approach keeps your CIC lean and allows for greater flexibility in your budget. If you do have an existing Limited Company (LTD), consider purchasing the equipment through it and then renting it to your CIC. This strategy can help you navigate funding preferences more effectively.
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Paying Yourself and Your Team
As you begin to secure funding, it’s crucial to establish a fair compensation model for yourself and your team. Contrary to the notion that you should work for free, it is entirely appropriate to pay yourself for your contributions. The Arts Council suggests a daily rate of around £340 for lead artists, while the National Lottery may recommend £150 for sessional workers. Breaking down your pay into specific roles will also strengthen your grant applications.
Preparing for Grant Fund Audits
Once you receive your funding, be prepared for audits. Grant funders will expect you to adhere to the budget you submitted. This means tracking your spending meticulously and ensuring that you can provide evidence for every expense. A well-organised financial record will not only keep you compliant but also enhance your reputation with funders for future applications.
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Conclusion
Starting a Community Interest Company with limited funds is entirely achievable with the right strategies in place. By focusing on building your network, writing compelling grant applications, and budgeting accurately, you can set your CIC up for success. Remember, every journey begins with a single step, and the resources and support available can guide you in making a meaningful impact within your community.
For additional support, consider joining communities of CIC founders and accessing resources that can help you along the way. Your journey to creating change starts now!
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Step 1: Define Your Mission and Objectives
Before you begin the formal process, it’s essential to define your CIC’s mission. Consider the community issues you are passionate about and how your skills can contribute to addressing them. Clear objectives will guide your activities and help attract funding.
Step 2: Choose a Name and Structure
Your CIC needs a unique name that reflects its mission. Ensure that it complies with the regulations set by the Companies House. Additionally, decide on the structure of your CIC, whether it will be limited by shares or limited by guarantee.