Birdsong

Goals & Process

Initially, Birdsong was financed as part of the ‘Year Here’ graduate scheme the two founders were enrolled in. After a successful pitch, they were invited to join the Incubator and venture network which through Crowd backer, a live crowdfunding event run in partnership with The Funding Network and RBS, helped to raise £10,000 for start-up and launching the website. Birdsong were further assisted with the legal and operational challenges involved in setting up. Following this they successfully raised an additional £200,000 through Crowdcube which allowed for expansion of the brand and the necessary cash flow to bring in Susanna as a designer.

The financial goal is to ensure that fair wages are paid to women at all stages of the supply chain, to support their charities and to make a profit. Birdsong are looking to maintain an 80% revenue, 20% grant funding operation to continue their organic growth, however, recent UK lockdowns have significantly impacted revenues and they have become more reliant on grants during this period.

Why did you choose this funding type?

This type of investment was chosen as it allowed them to capitalize on their positive mission which was well supported meaning they could raise money and gain support without incurring significant ongoing repayments. This has meant a continued investment in the product and a ‘made to order’ product line where investment is made in samples first and minimizes labour costs until orders come through. This helps maintain a positive cash flow.

Successes & Challenges

As a social enterprise, Birdsong have to constantly raise finance in the third sector where direct government support is somewhat lacking. The regressive nature of corporations tax significantly impacts social enterprises in the UK and sees Birdsong paying more percentage in tax than Amazon. They have, however, enjoyed a lot of support directly from consumers and through crowdfunding thanks to their clear mission. They have received fantastic support from ‘UnLtd’ who offer social enterprises grants, workshops, mentoring and support at all stages of their journey.

Birdsong have faced significant challenges that seem to be consistent with many social enterprises being that of maintaining cash flow. Currently they continue to live month to month. Furthermore, their brilliant mission does come at a cost in a highly competitive market; Birdsong’s cost price remains comparatively high as a result of acting ethically – paying workers a fair wage and paying for sustainable materials. 

Takeaways & Additional Information

The various successes and challenges have been underpinned by several factors - firstly the age and business experience of the members of Birdsong; it has been as learn as they go process. Thankfully, they have continued to benefit in terms of finance and advice from many organisations set up to help social enterprises and they advise that help is out there; do the research and find out who can help you, not only at start-up, but as you progress.

A social enterprise requires a great deal of resilience in order to succeed; a noble mission is part and parcel of a social enterprise, but Birdsong advise to not to overcompensate on ideals versus understanding the realities of being a business. Ultimately, understanding this is the key to longevity.