How to start a social enterprise start-up with… Luminary Bakery.

Who: Alice Williams

Brand launched: 2014

Product: Baked goods including brownies and cakes, as well as a cookbook, Rising Hope

Impact: Using baking as a tool to train women facing multiple disadvantages in London. They’re equipped with skills in employability and entrepreneurship while receiving holistic support. The goal is to help them break cycles of poverty, violence and disadvantage — which often are experienced in tandem — by providing a community, confidence-building and the tools to create a career.

SSM: Can we go back to the very start of Luminary Bakery. What came first — was it the brand idea or the impact idea?

Alice: I set it up in response to a need. The kind of products and what business we could set up to help that need dictated the kind of the angle at least I’d say.

I was working in London and meeting women facing multiple issues like homelessness, domestic violence, a criminal record.

I got even more passionate about helping such women when I was in Thailand volunteering with a NGO that helps women exit the sex industry. It gives them a trade to learn the skills and make a living, and that was a jewellery business.

When I came back to London, I didn’t imagine setting up something like that but I guess that sort of model was in my mind. I realised that exactly the same sort of opportunities were needed — I really wanted to provide a way for women to earn an income without being vulnerable to exploitation.

So, wanting something that, if you haven’t finished school or perhaps weren’t that academic, you could still learn that skill or trade, no matter what age you are.

We sprang out of a little community cafe in Brick Lane. We were teaching baking to women and then selling the cakes in that cafe. From there we tried to grow the business and grow the support and opportunities that we were offering them. I think we just pushed both sides of it at the same time — the product and the impact, which I think means both sides, suffered.

But also, it meant that we were having impact right from the start, and that was really important to us.

SSM: Did you launch as a side hustle?

Alice: It was a slightly odd arrangement in that myself and the two bakers that we started with were working in a community cafe. So we all could sync shifts — I could make sure that we all had an afternoon off together to go and work on Luminary.

And then, as Luminary started to grow, we could start dropping shifts. I realise when you’re full-time in another job that’s not quite as easy you kind of either have to be all-in, or trying to grow your business on the side. So, we were in really fortunate position that we could just drop half a day, drop a day… and just do that slowly until we were able to go full-time. It was really good for flexibility.

SSM: How is the business set up?

Alice: In 2019 we separated out the two [the business and the charity]. Before that we were purely a charitable entity in our umbrella organisation. The business is now purely a Limited Company and the charity is a registered charity, and there’s an inter-company arrangement. That’s not how a lot of social enterprises structure themselves.

SSM: So you decided not to go the CIC route?

Alice: We wanted the charity to be able to access as many grants and donations as possible to make sure that business success wasn’t holding us back. Equally, charitable grants and donations have a limit, and there’s so much business investment out there to help businesses grow.

I wanted both sides of what we do to be really interlinked, but to have enough resources to run themselves as they need to.

So it’s still only a few years into running it like that. It is a bit unique, so we’re still finding our feet, we’re still finding our own issues that we need to work through and unique challenges that that presents, but I’m still confident it is the right thing for us and the right way to operate.

SSM: How did you realise that you could separate out like that? Did you get advice from anywhere, like a social impact accelerator programme?

Alice: Yes. At the time it was called something different, but now it’s called Impact Central — they got us a lot of legal advice and a couple of the ventures that were with us on that have gone for the same structure.

And when we got investment from Comic Relief, they took a long time looking at our model. I think they were nervous about anything profit-making. It took quite a lot of scrutiny and talking through but actually, once they came around, they were like — this is genius, other people should be doing this. It definitely isn’t the right way for everyone but I’m really comfortable that it works for us.

SSM: How was the experience of being on that accelerator? Was it good timing for you to join?

Alice: We heard about it through our charity links and just applied. We were in the first cohort.

We were further along in our journey than most of the other ventures on the programme. We started operating in 2014, and it was 2018 that we did the accelerator, whereas, lots of others hadn’t even started trading or they were in their first year.

But it was a really good time for us because it was a pivotal point in the trajectory of Luminary. It was a key decision-making time of how we were going to set ourselves up for scale.

So, we probably saw it in a very different way to the very start-up stage businesses and got different things out of it than they would have done.

SSM: How do you think running a social enterprise start-up is different from a Limited Company but, I mean, essentially, you do both.

Alice: Although it is a business, it’s still not purely commercial. It’s still got social impact as the main reason for its existence. So, although yes, it is technically a limited company, you still have those kinds of decisions that any social enterprise has to make, like — is this furthering our impact?

I don’t know if this is the case for every social enterprise, but there are trade-offs we make that mean we make decisions that aren’t the most commercial decisions — like hiring a woman that’s come through our programme; you might not choose to invest in someone who needs a bit of extra training and support, and things like having safeguarding procedures, but that all helps us accomplish the mission.

And you’re also held to higher ethical standards on everything. As soon as you are doing something with a social purpose. So our impact is obviously very specifically women’s as a social purpose, but then all of our environmental impacts and things like that are held to a higher standard too.

SSM: And how are you finding those women that benefit from your social impact, is it through partnerships?

Alice: They are referred. Now that we’re a bit better known women do find us themselves but they do still have to go through a referral process so they might live in a refuge and they’ve got a support worker there or a social worker who will refer them. And we do recruitment for our cohorts.

We recently interviewed 60+ women for 28 places on our programmes.

SSM: How did you find it setting up those referral partnerships in the initial stages of the business?

Alice: I was definitely more in the women’s sector than I was in the business sector. So, building foodie networks was more secondary.

There was a phase where we were very oversubscribed and then we got lots more spaces when we opened the Camden location, so we were wondering how much marketing to do around the course, because we didn’t want to be oversubscribed and turning women down. So we didn’t do much marketing initially, to see how it went. And then we couldn’t fill all the spaces, so we did a big drive and got back up.

During 2020 women’s services were dealing with so much escalating domestic violence and much more crisis, and we weren’t sure if actually, it’s not that there’s not a need, it’s just whether women and services are thinking about employability and thinking about the future if they’re just having to deal with getting their basic needs met — going into firefighting mode.

We had no idea how Covid would affect us, but it’s been good to intentionally reach out to new organisations and make sure that they know about us and make sure that workers know the criteria so they’re not referring people who are just not ready for it.

SSM: It sounds like Covid impacted the business a lot?

Alice: Hugely.

Over the various lockdowns, we initially closed everything for the first few months, and spent that time working on back of house operations.

I mean it affected everything. And then also our new cafe in Camden, in that tourist area — that just went dead, so we had a really hard time keeping that open. Whereas our Stoke Newington cafe is in a very residential area, so that got really busy for takeaway.

We had wholesale customers, so they all closed overnight. We were doing weddings and they all stopped for the whole year. But we managed to move to corporate clients. We could only deliver within London initially so Covid gave us a kick up the backside to get nationwide delivery sorted!

During Covid, more so than prior, we saw big companies trying to look at ways to treat staff who were remote and that’s been really good and kept the business going — kept job opportunities going for women. So in lots of different ways, I think every single element has been affected.

SSM: I guess you just have to keep an eye on things, and be willing to pivot?

Alice: Exactly, and I tried to make sure we have lots of different ways of making money, which has been really beneficial with Covid because you can just sort of turn off one channel and put your energy into another channel.

So that’s been a positive, but a negative is that we’re always spread too thin because we’re always trying to have lots of different options. So, actually turning off wholesale during Covid, we decided not to bring it back.

We realised actually we want to focus our energies on direct to customer and that helped us make that very bold decision. Without Covid we just wouldn’t have had the courage to cut that revenue line.

SSM: What about when you first started out — you opened with the Stoke Newington location first and then you expanded to Camden. How did you get to that point? Was it all bootstrapped or did you apply for grants or funding?

Alice: When we launched Stoke Newington we were still a charity so we were able to access some grants. But charity donors are quite specific about what you can spend the money on so we were quite limited, and it was majorly bootstrapped — so much so that at one point we had to stop the builders until we’d raised more cash!

That was one of the main reasons for wanting to separate out the business from the charity. The business could get investment and actually pay for the people. And that accelerator programme helped us access investment and that was how we were able to open the second location. We never would have raised enough charity grants or trading income to cover the second site.

SSM: And that was because of Impact Central? Because they now have an arm just for investment where they introduce the graduate to an investor network?

Alice: Yes, we found a couple of investors ourselves but they introduced us to the majority of them through a pitch event and we took angel investment.

It’s been amazing to have, because they’re all motivated by impact.

SSM: Do you have any advice for people that are going through that process? Raising investment can be quite gruelling, it seems like a full time job in itself.

Alice: I think that’s the thing — you really underestimate how much time it’s going to take. Also how much money the work is going to cost you — raising enough to pay for the legal costs on top is good idea! Luckily the accelerator programme helped factor that in. I think I would definitely recommend a ‘getting investment ready’ programme, unless you’re really familiar with investment. I think it is worth the time and energy to just make sure you think about it properly and factor in what you need to factor in.

SSM: You’ve received a lot of recognition in the form of awards, press, etc. but is there one in particular that you’re most proud of?

Alice: I think the culmination of a lot of the things that Luminary has done is in the cookbook that we launched, Rising Hope. That I think is a real symbol of what we do, and it’s something we’re so proud of because it’s a real community effort.

And women from the first ever cohort to more recent training participated and put their recipes into it. I think that is a really tangible example. Obviously you can walk into a Luminary cafe and get a tangible example of what it is, but I think in terms of something that we’re proud of that would be a great example of our homes being sold all over the world to see.

Before delivering nationally, our reach was really just London, so to get to see someone in, say, some little bookstore in Germany picking up a copy of Rising Hope and hearing a story of a woman who just thought she’d never be anything is amazing.

SSM: How did you come to do the book? Was it something you’d always wanted to do?

Alice: A couple of people had approached us over the years, but it had never quite felt like the right time or that we had the right reach. Because you don’t want to do all of that work and then it’s not really getting anywhere. But an agent approached us and she could help us selling it to big bookstores. At that point, it felt like the right time.

Obviously I had no idea Covid was going to strike but the release was in August 2020 so we weren’t selling anything else at that point because everything else was closed, so it was so good to have something we could sell. Timing-wise, in terms of the time that it took to make it, that worked brilliantly and then also just the launch date worked out, miraculously as well.

SSM: There’s always things in running any business that go wrong from time-to-time. Would you be willing to share anything from Luminary’s history?

Alice: There are literally 1000’s of things that have gone wrong! There’s just things that we know we’re never going to do again, and I mean just stupid examples. Last year we sold Christmas fudge and we should just have never done it.

In business, you just do what you can at the time with the information that you have at the time. There’s no point beating yourself up about it. Just make sure you don’t do it again.

I could probably think of an example every single day of stuff that’s gone wrong.

SSM: Are you quite good at reflecting on what’s gone well and what’s gone badly as a team? I suppose it all comes back to the mission, right?

Alice: I think so. When you’re in a start-up, you don’t have options to just keep plugging away at something that’s not working. You have to look quite quickly and decide if something’s a waste of time. So I think it naturally is probably something that we’re doing all the time and not really realising we’re doing, because we’re not all sat around a table going well, how did this go?

SSM: Does that mean that you’ve had to get really good at reading the accounts? I feel like this is one of these areas like cashflow that people don’t talk about. For example, what it takes to really look at the numbers?

Alice: With the accounts, they’re still, say, four or five, six weeks after the fact. You’ve already got to the point where you’re like, well, there’s nothing I can do about that now.

Month-on-month, we try to make sure that we review what happened that month and why we’ve not hit certain targets or why we’re not profitable. We scrutinise. We’ve now got someone in as Finance Director — she’s helped get enough reporting in place so that you can see. You can’t make good decisions without good financial data. It just takes time and systems to make sure that that is all being logged correctly which is hard when you’re changing and pivoting constantly!

SSM: Yes, because your decision making is only as good as the data that you’re feeding into that. How did you find your Finance Director because that’s such a crucial hire, or freelancer to find?

Alice: We just put an ad out that we needed a Finance Director. We had people at bookkeeper level and realised we needed someone who could do a bit more, bring more analysis, as well as make sure the reports are doing the right thing and then making sure the bookkeeping is happening correctly. I think that’s an essential function to invest into.

SSM: And at that level, I guess it’s not so much about understanding your business and the impact, it’s very much about just having the expertise?

Alice: Yes, especially because of the fact that we’ve got a business and a charity and there’s inter-company accounts as well, it was important that she knew how to complete the accounting, and she really has accounts for two separate entities.

The sweet spot about being a social enterprise is that you need people that have worked in purely commercial places, you need people that have worked in purely charitable places. And then you get to glean all the best of that and I think it helps give people who’ve perhaps worked in much more corporate jobs and got lots of skills the opportunity to use those and feel more purposeful in their work.

SSM: How do you currently think about tracking and communicating your impact? Because it can be quite tricky I suppose trying to drill down, say, to hours of training or hours of employment on one product sold?

Alice: Our charity has done a lot of work on impact measurement and tracks so many things to help measure what success looks like in women’s lives. Sometimes as a business it’s hard to know what to track — I think hours of employment is the easiest way to do it but then for every hour of employment, it takes so much to get to that [on a per product sold basis] that it feels like quite a small thing. Case studies help to explain the depth of what that opportunity means for a woman.

SSM: You do put out impact reports and I remember seeing charity pages to do with the business.

Alice: Yes, it’s easier to track what the trainees are learning and the support outcomes and that’s the charity’s job, whereas the business’s job is to employ those women. And so the impact outcome literally is just employment hours, really. But there is so much going on when you employ someone, all those extras: a sense of purpose and community and skill progression and things that happen from being in work. There is so much more that’s going on. Like the fact that if she’s earning she’s less reliant on a partner and all that — harm reduction. It would be great if we had the resource to invest into mapping that out more fully.

SSM: It’s like reducing something that’s really quite complicated to a soundbite, but the soundbite is also what helps sell the product…

Alice: Yes, sound bites are still important because [as a customer] you’re like “I can see the impact I’m having.”

SSM: Is there one piece of advice that you’d give your younger self?

Alice: I think often a lot of the problems come down to lack of finance and lack of resources, and if you could just pay people better, if you could just pay for the equipment, it would make things so much easier.

So I think as heralded as bootstrapping is, I would say (again this is like the failure conversation…) I don’t know if we could have raised investment earlier than we did.

Sometimes, I’d only commit to paying for things when it was beyond the point, that there was no other option anymore and actually if we’d paid for it a year earlier… I should have been bolder, but I didn’t want to overextend us.

At the time you just have no idea where the money’s going to come from. But looking back, well… there are still times when I’m like I don’t know where the money’s going to come from. But it’s gotten to the point where we can’t survive without that now. So I’m no more certain that we’re going to be able to fund it, but it’s just beyond the point where we can function without it.

So, I think maybe being a bit bolder, to spend money.

SSM: It’s interesting isn’t it because if you went back and did things differently, how do you know you’d get to the same point?

Alice: Exactly. You don’t know that you’d get to this point sooner, you just might take a completely different route, Or learn different lessons. And I think that’s like when you asked about like the things that have gone wrong, I’m thinking — but they’ve led us here.

Follow Luminary Bakery at @luminarybakery and on LinkedIn at Luminary Bakery.

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