What's a Community Interest Company?
Imagine a business that doesn't just aim to make money, but also works hard to help people and improve our community. This is exactly what a Community Interest Company (C.I.C.) does. Think of a C.I.C. as a business with a conscience.
Unlike typical companies that exist (mostly) to make profits for their owners or shareholders, the main goal of a C.I.C. is to make a positive difference to local people and/or the environment. By generating revenue like a traditional business, a C.I.C. is able to operate a sustainable model that can support community objectives over long time periods.
In a nutshell, C.I.C.s are businesses that care and contribute; they prove that you can do well by doing good.
Draft & Flow is a C.I.C.
Draft & Flow, Aberfeldy’s first-ever community cycle workshop, is a registered Community Interest Company* . This means we’re subject to an 'asset lock' that ensures our company’s assets (such as money, property, or equipment) are used for the community's benefit. It’s essentially a promise that the company’s resources will always be used for public good, and not for private gain. To maximise Draft & Flow’s commitment to the community, we’ve taken the additional step of making Draft & Flow a “Schedule 2” C.I.C.
Schedule 2 means we have more stringent restrictions on how our profits can be distributed. The Directors (Brett, Nick, and Jerome - and anyone who becomes a Director in the future) cannot receive any dividends (i.e. payments from profits). Our profits must be reinvested into our community objectives, or distributed to other asset-locked organisations with similar aims, such as charities. One example of a local asset-locked organisation is Glassie Bike Park, which manages the development of the beautiful mountain bike trails on Glassie Farm.
While C.I.C.s do allow for compensating Directors for the work they perform, at Draft & Flow we’ve opted to make our Director roles volunteer-based. In other words, the Directors are not compensated. However, we will compensate team members for performing revenue-generating jobs in the future. For example, an employee (even a Director) could be paid for working as a cycle mechanic. Any payments must be formally documented, fair and reasonable for the services provided, reported in the annual C.I.C. report, and comply with the C.I.C. regulations.
It’s also worth noting that Draft & Flow can never convert back to a standard company. We’re a C.I.C. for good!
Why did we become a C.I.C.?
There are three reasons Draft & Flow opted to be a C.I.C.:
- Our commitment to the Aberfeldy community
- Personal values and interests
- The general direction of the bike industry
Our commitment to the Aberfeldy community: When working with other businesses, potential funders, and the public, being a registered C.I.C. makes our commitment to the community instantly clear. We exist not to maximise income, but to create positive impact locally.
Personal values and interests: It may sound strange, but the three Directors aren’t interested in running a full-scale commercial bike shop. We prefer pedalling bikes over peddling them, and we don’t want to be pressured to sell, sell, sell. More importantly, we want the community workshop to be a place of enablement, learning and social connection. A C.I.C. is better aligned with these aims, and critically, it ensures the focus on community benefit will continue well into the future.
The general direction of the bike industry: Like many high street shops, bike shops are facing challenging headwinds owing to online shopping and direct-to-consumer sales. Compounding this is a post-pandemic slow-down in the bike industry itself. But there’s still a high demand for local bike servicing, and we believe community-focused service shops are the way forward.
What success looks like
In short, a C.I.C. blends business with community benefit, and this aligns perfectly with our goals for the Draft & Flow Community Cycle Workshop.
What does success look like for us? Put simply, we want to get more people riding, and keep them riding. We’ll achieve this by providing cycle maintenance, cycle maintenance education, parts/accessories/bikes sales, and a dedicated space to connect with others around bikes (read more about our plans here). Profits will be reinvested into our community objectives, or used to support similar local initiatives.
In our next update, we’ll tell you more about what you’ll find at the Draft & Flow Community Cycle Workshop. In the meantime, we’re looking for in-kind donations to get the workshop up and running. If you’re able to donate any items, please get in touch with us at workshop@draftandflow.com.
* For those who like the nitty-gritty, our details are Draft & Flow C.I.C., Company #SC755787.