Part Two – What is a Community Business?

As with any sector, the language used by those already working within it can often be a mystery to those outside. With that in mind, here is the second of two blogs which aim to explain exactly what a Community Business is. You can look back at part one, which answered the question What does it mean to be a Co-operative?.

Community Business is a significant sub-sector within the wider social enterprise sector. It shares the same definition as social enterprise: an organisation trading for social purpose with profits reinvested rather than going to shareholders. But a community enterprise is more specific in that it is based in, and provides benefits to, a particular local neighbourhood or community of identity.  A community enterprise is owned and managed by members of that community.  It is an organisation run BY a community as well as FOR a community.

Figures from Power to Change from 2016 show:

  • There are over 7,000 community businesses in the UK
  • Making more than £1 billion of income each year
  • Employing over 36,000 members of paid staff
  • Supported by nearly 200,000 volunteers

There are four key elements to Community Businesses:

  1. Locally Rooted: They are rooted in a particular geographical place and respond to its needs. For example, that could be high levels of urban deprivation or rural isolation.
  2. Trading for the benefit of the local community: They are businesses and must generate income. This can come from things like renting out space in their buildings, trading as cafes, selling produce they grow or generating energy.
  3. Accountable to the local community: They are accountable to local people, for example through a community share offer that creates members who have a voice in the business’ direction.

4.Broad community impact: They benefit and impact their local community as a whole. They often morph into the hub of a neighbourhood, where all types of local groups gather, for example to access broadband or get training in vital life skills.

Power to Change have also created this useful video which further explores Community Businesses, as well as the benefits and challenges they bring:

If you’re interested in learning more, here are some useful links: