Types of trading

There are different types of trading but all are associated with selling goods and/or services on the open market.

• Mission-related trading - Selling ‘core’ related goods or services which are directly related to an organisation’s aims and objectives. As well as furthering an organisation’s mission, this form of trading can also generate valuable surpluses.
• Unrelated trading - When it is not possible for an organisation to combine its services with generating income, unrelated trading may be considered; selling goods and services which may have little relation with core aims, but generates profit which can be used to subsidise core work.
• Cost recovery - An element of mission-related trading which involves charging user groups and beneficiaries to cover the basic cost of a service, not to make a profit but to provide a subsidised service.
• Social firms - This model is often a route into trading, arising from the nature of an organisation’s activities. Social firms aim to create real jobs and training opportunities for people marginalised from the labour market or seek to deliver high quality, affordable services beyond those of the state.

An important point to note is that trading goods and services is all about merging what your organisation does (its mission) with ways of generating income (the money).

Key messages to remember are:

• The best trading areas are usually those which emerge easily from the current work of the organisation or from skills or capacity already in house
• Trading activities should not be allowed to distract an organisation from its mission
• Trading is a process which must be carefully considered before being embarked upon