• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
Download
 
 Enterprise for Communities
The Community Enterprise Development Model 
Prepared By
Dr Rory Ridley-Duff (Sheffield Hallam University)
r.ridley-duff@shu.ac.uk
 Peter Beeby (Managing Director, School Trends Ltd)
peter.beeby@schooltrends.co.uk
 Dr Rick Norris (Strategic Projects Director, School Trends Ltd)
ricnorris1@aol.com
 
Please direct feedback on this document to Rory Ridley-Duff 
Revision History:
Date Version Comments
21 November 2003 1.0 First Draft (prepared by all authors)1
st
January 2007 1.1 Final Draft (prepared by Rory Ridley-Duff, post-PhD).
 
1
Introduction
This document is best read in conjunction with sections 4
 – 
6 of a submission to theCommunity Interest Company consultation made on behalf of Sheffield Hallam University by Rory Ridley-Duff, John Cullen, Peter Beeby and Rick Norris. The ideas presented are supported by a set of model company rules first prepared by Rory Ridley-Duff in 2007, and revised in January 2009. For convenience, links to these documents are provided below:
Enterprise for Communities (CIC Consultation Submission): http://www.scribd.com/doc/13647544/  Social Enterprise Model Rules (Surplus Sharing Model): http://www.scribd.com/doc/11545936/  The purpose of the development model is to create a framework through which entrepreneurs,support organisations and educators can facilitate the creation of community enterprises that utiliseemployee-ownership and democratic values to achieve commercial success. The modelacknowledges that entrepreneurs will only be attracted to the sector if both social and financialrewards are available. It outlines how democratic values and shared-ownership can be introduced by organisation leaders.The model recognises the unique role of entrepreneurs, but promotes an alternative exit route viaconversion to employee-ownership rather than the conventional exit route of public floatation, or  private sale. After the efforts of the founders to establish a viable profitable business bear fruit, themodel outlines the path to the establishment of an Employee Benefit Trust (or Community InterestCompany). This provides entrepreneurs with an equitable return for their efforts at the same time asensuring long-term wealth is passed to (and locked into) the local community.Development takes place in three phases:
 
Phase 1
 – 
Feedback 
 
Phase 2
 – 
Participation
 
Phase 3
 – 
DemocratisationOutside shareholders (up to 25%) are permitted during Phase 1 (Feedback) and Phase 2(Participation) of development. A condition of any share issue is that in Phase 3 (Democratisation)shares are sold to the EBT (or CIC), directly to employees, or converted to loans so that theEBT/CIC owes at least 50.1% of available shares.
 
2
Phase 1 - Feedback
During this phase, an entrepreneur (or group of founding members) establish a company using anyavailable sources of finance. The community company management model is employed to agree aset of shared values and vision. It is used to guide matters of internal organisation and managementstyle.a)
 
 Established by
: founder members/entrepreneur  b)
 
Characterised by:
Entrepreneur led group with formal consultation and feedback mechanismsc)
 
 Ends when:
it is no longer possible to run the company productively through a combinationof one-to-one meetings and regular company-wide meetings. The pressure to move toPhase 2 is likely to occur when the group grows larger than 6 people, and should have taken place if there are more than 10 people employed by the company.d)
 
Shared Prosperity
: is achieved via a simple Profit Share arrangement.e)
 
 Funded By
: any source, keeping 76% of shares in hands of parties committed to employee-ownership.Community Company
Management Model 
fully employed during this phase. Values and Visionagreed. Shared Prosperity Pillar only contains a commitment to Profit Sharing. Employmentcontract includes community pillars.Community Company
Governance Model 
is an embryonic board (the first 6 employees form aclose-knit group led by the entrepreneur).Community Company
Ownership Model 
does not apply.
Founder(s)
Entrepreneur Founding Members + First Generation of Employees 
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...