Day to day life at the Paper Cup Project looks like any other café. People come and go, buying coffees and cake and chatting to staff as they go about their business. The difference between the Paper Cup Project and any other café, is that Paper Cup Project is a social enterprise and a space for those experiencing homelessness to find community.
Creating Revenue
The enterprise, who are a CIO (Charitable Incorporated Organisation) and a registered charity, operates a café based revenue model. Any profit is reinvested back into the organisation to achieve its charitable aims. The café is the trading arm of the organisation, providing a revenue stream as well as filling a gap in provision for people experiencing homelessness in Liverpool.
The main aim of the coffee shop wasn’t to create revenue when it was first established. It was created to provide routes into training and employment as well as community for people experiencing homelessness in Liverpool. As well as offering barista training, they also have a pay it forward scheme where you can pay £3 for someone who is experiencing homelessness to come in and have food and a hot drink.
Michelle Langan, founder of Paper Cup Project, says, “When we started off the trading arm, we never really thought of it as a revenue source. We saw there was a gap in provision for people experiencing homelessness in Liverpool and that was why we set it up.”
Giving Consumers the Choice
Paper Cup Project have become a destination coffee shop for many locals. Once people hear about the cafe, they are keen to spend time and money there. The charity gives customers an opportunity to spend their money in a more socially conscious way than if they were buying from a big chain.
The model that Paper Cup Project employs as a registered charity that trades through a coffee shop, is business to consumer rather than business to business. They had an income of £86,693 with an expenditure of £81,757. Working in this way means they are able to address stigma and build community by encourage local people to engage with the charity and people who use their services.
Michelle says, “For us as a charity it’s also about giving customers an opportunity to spend their money in a better way. If they spend a £1 with us, the social value of that £ is much more with us than one of the big coffee chains because of what customers’ money is going towards. It’s not just going into pay shareholders.”
Get the Message Out
While it has been successful in building a reputation for itself as a local charity working for local people, the café doesn’t yet break even. Grant funds are used to cover the remaining costs, which are accessible due to Paper Cup Project being a social enterprise.
The organisation has been able to work with local funders but there are still some barriers to accessing grant funding, as Michelle says, “I still think it's difficult to access larger grant funding pots. Smaller, local grant funding is accessible, and it helps that funders are able to visit and see the shop. We’re in a situation where we’re not large enough to access certain funding pots.”
Setting good foundations
Starting a social enterprise isn’t easy and Michelle recommends beginning with a good foundation, “Make sure you’ve got a good business plan and good foundations before you start off. I started off with a budget of zero and we got offered the shop. It was a real gamble, but it paid off.
“We were able to get going because a company saw us in the local media and wanted to support us for their CSR. This came with £10,000 in grant funding that allowed us to start. Get the plan boxed off and as soon as you've done that, get the message out to as many people as possible. That’s a way of attracting people to your project who might be able to support your work.”
Paper Cup Project’s hard work has seen them become a well-known and loved in Liverpool. It has also meant they are having a real impact on the lives of the people they work, as much as the lives of those they serve.
