You've Set Up Your CIC, What’s Next?

So, you had an amazing idea, set up a Community Interest Company (CIC), and successfully gained some grant funding – but now you’re wondering, “What do I do next?” You’re not alone! Many CIC founders are passionate about their cause but struggle to navigate the business side of things.

You now need to turn your vision into a sustainable social enterprise. But just where do you start? A well-structured CIC blends multiple income streams to create financial stability while delivering its social mission, not just grant funding...after all it IS a trading company and is expected to make profit to reinvest back into it’s activities.

First Steps After Incorporating Your CIC

Once your CIC is registered, there are critical steps you need to take to ensure smooth operations:

✅ Set Up a Business Bank Account – A CIC must have a separate business account to keep finances transparent. Choose a bank that understands social enterprises and offers services tailored for CICs. This account will be essential for managing grants, trading income, and payroll. If possible, you should have at least 2 unrelated signatories on the account – funders don’t like it if there are related parties or only one director with access to the funds.

✅ Register for Corporation Tax – Ensure you’re compliant with HMRC regulations and understand your tax obligations. When you set up your CIC you should automatically have been registered with HMRC for Corporation Tax – even if you don’t make a profit you will have to submit a Corporation Tax return each year (and 2 in the first year).

✅ Register for VAT (if required) - If your CIC earns above the VAT threshold, currently £90,000 in a rolling 12 month period, you must register for VAT. Even if you expect to be under the threshold, VAT registration can be beneficial if dealing with VAT-registered customers. Chat to your accountant to see if/when you need to register.

✅ Obtain Insurance – Before delivering any services, protect your CIC by securing appropriate insurance coverage. Depending on your activities, you may need public liability insurance, employers' liability insurance (if you have staff), professional indemnity insurance, or directors' and officers' liability insurance to safeguard directors and board members. A reputable broker should be able to help you get the correct cover for your individual circumstances.

✅ Set Up a PAYE Scheme – If you have directors or employees who will be paid through the CIC, you must register with HMRC for PAYE (Pay As You Earn). This ensures proper tax and National Insurance contributions are deducted and reported correctly. If there won’t be anyone paid from the CIC for a while, then you only need to set up PAYE once you start to pay anyone. It’s usual for the directors to get paid first for delivering the services. You should also be aware of pension auto-enrolment as soon as the PAYE scheme has been set up – again, speak to your accountant who will be able to tell you what you need to do and when.

✅ Create a Pricing Strategy for your services – As a CIC, you should be planning to trade, so establish pricing that aligns with your social goals and market demand is important. Consider cost recovery, affordability for beneficiaries, and competitor pricing to ensure sustainability.

✅ Draft a Business Plan – A well-structured business plan is essential for guiding your CIC’s growth and securing funding. Your plan should clearly define your mission and objectives, outlining how your CIC will create social impact. It should include detailed revenue streams, whether through trading activities, contracts or grants, and a breakdown of your cost structure. Identify your target audience and explain how you will engage with them. Additionally, include financial projections covering at least the next three years, ensuring that income and expenditure align with sustainability goals. Finally, outline key milestones and risks, along with contingency plans to navigate challenges effectively. This should include your mission, objectives, revenue streams, target audience, and financial projections. The business plan is not just a document to help you secure funding, but a roadmap of how to get from Day 1 to the end of year 3. You should revisit and review the plan regularly, because....life happens, and things change!

✅ Develop a Marketing Strategy – Start promoting your CIC to your target audience and stakeholders. Consider using social media, local networking, partnerships, and community engagement to raise awareness and attract customers or supporters.

✅ Apply for Grants and Contracts – Research funding opportunities and potential service contracts. Identify grant bodies, corporate sponsorships, and government contracts that align with your CIC’s mission and prepare compelling applications. A great place to start with this is on the free website Charity Excellence. Ensure you are using a full cost recovery model in your applications to cover not just the direct delivery costs but also the enabling costs of running your CIC, which include administration, governance, and infrastructure.

✅ Build a skilled Board or Advisory Team – Surround yourself with people who can provide strategic guidance and support, whether Directors of the CIC or advisors. Choose individuals with expertise in finance, marketing, governance, or your specific social mission to strengthen your CIC.

✅ Appoint an Accountant and/or Bookkeeper – Keeping accurate financial records is crucial for compliance and tracking of grant funding for reporting. A specialist accountant and bookkeeper can help with tax efficiency, ensure compliance with CIC regulations, and help you keep on top of any grant expenditure.

✅ Decide on a Bookkeeping System – Determine how you will track your CIC’s finances from the start. This may initially be a simple Excel spreadsheet, but if you need to track multiple grants and income streams, consider using accounting software such as Xero, QuickBooks, or FreeAgent to streamline financial management and reporting. Beeston-Clarke Accountants specialise exclusively in working with Xero with our fully outsourced finance department clients.

✅ Ensure Compliance with CIC Regulations – File your accounts and CIC34 report on time and make sure you don’t leave it to the last minute! Accounts must be filed with Companies House within nine months after the year-end. However, in the first year, the deadline may vary depending on your incorporation date, so check Companies House for the exact filing date for your first accounts.

Starting a CIC is an exciting journey, but it requires careful planning and execution to succeed and be sustainable. The team at Beeston-Clarke Accountants specialise in the compliance (Accounts and Corporation Tax) for CICs. If you'd like more information, please book a discovery call.