Micro-Enterprise With A Mission

A Melbourne community organisation is dealing with the closure of a much loved social enterprise cafe by turning to smaller scale micro-enterprises, writes Nadia Boyce in this week’s Spotlight on Social Enterprise.

Established in 1946, Prahran Mission is an agency of the Uniting Church in Australia and provides emergency relief services to those experiencing poverty, homelessness and economic disadvantage as well as rehabilitation services to those experiencing mental illness and psychiatric disability in Melbourne's inner southeast.

The organisation’s social enterprise streams are growing in number, anchored by its stalwart opportunity shops and the Mission Caters, a hospitality arm providing a function venue and catering services.

Yet the program has had a difficult year, having been dealt a blow earlier in 2014 when its Government funding was cut without warning, forcing the closure of its much-loved Chapel Street Cafe.  

It has meant less opportunity for the organisation to achieve its aim of providing pathways to training and employment for people with mental illness, who, according to the organisation, face a 70 to 80 per cent unemployment rate in Australia.

Pro Bono Australia News spoke to Erica Myers-Davis, General Manager of Fundraising & Community Relations at Prahran Mission, to talk about the organisation’s next steps and their fresh approach to creating opportunities for the disadvantaged.

Testing Times

When Prahran Mission did its building appeal in 2009-10, the organisation built an extra floor on the premises to push forward with its social enterprise initiatives, a response to the needs of its clientele to access work and training opportunities. It set up the top floor as venue space and put in a full training kitchen for its catering arm, and also ran a flourishing cafe facing onto Chapel Street.

In the past couple of years however, some programs have fallen victim to circumstances outside their control. The cafe is no more, and remains empty since its closure several months ago.

“After 6-12 months hospitality work experience and training, we’d then support people into full time mainstream work,” Myers-Davis says.  

“That was all cool, except the State Liberal Government cut all the TAFE funding so we were then unable to offer the training side of what we were doing – then we basically had to can all those programs.

“We still do external catering, and catering in the venue, but we don’t have the cafe. We’ve managed to retain the core business.”

Myers-Davis says the targeted employment model has required a consistently high financial base to pay salaries, something difficult for many small businesses at the best of times.

“With the way the models are set up, traditionally you might have an op shop with one paid manager and the rest volunteers, and all extra funds go back into the organisation. With our op shops we actually have about 8-10 targeted employees, so we still offer paid work for 12 months to people, but it means that where op shops would normally create lots of revenue, we use our revenue to actually pay our employees,” she says.  

“The cafe was the same. It was run as a commercial cafe with bills and salaries, unlike a training cafe where you’re using students and the labour’s for free. Between losing the training funding, and sales on Chapel Street, that was the end of the cafe.”

Myers-Davis cautions against investing too much money at the outset.

“Bear in mind that the numbers aren’t on your side, even If you’ve got some funding that you kind of think is secure. We had no idea it was going to be cut. And then Swinburne moved, and we were working with Swinburne TAFE, and we had no idea that was on the horizon.”

Yet she says that despite the difficulties, social enterprise has benefited the organisation beyond its expected social impact.

“It’s been great PR. A lot of people became more aware of us when we had the cafe operating, and certainly through the catering business we’ve got lots of corporate clients we service.”

Hospitality Heat

For Prahran Mission, hospitality was a logical step, given the organisation has operated a canteen serving hot meals to the community since its inception. Yet moving into the field commercially brought with it a whole new suite of challenges, Myers-Davis says.

“If you’re not already doing it, don’t do it. It is an incredibly competitive business,” she says.

“Because we’ve got targeted employees, we’ve got the pressures of meeting commercial targets, but we don’t necessarily have a labour force that’s at full capacity – so there’s that sort of conflict. It’s quite high pressure working in a kitchen, so sometimes people couldn’t cope with the work.

“Probably the biggest challenge with hospitality was that we brought in people who were experts in those areas, that was their background. But there was a bit of a culture conflict. We’re a welfare social agency versus people who are commercially minded –  they’re just too different worlds.

“Having a commercial chef versus someone who’s worked in a Not for Profit kitchen as a cook, you’ve got completely different ways of working.

“Make sure that if you’re bringing in external people to the sector that they really understand the culture, and understand that if you’re working with disadvantaged people, its going to be different to working with people who are fully able with experience.

“At times I think it might have been frustrating for those people who had that commercial background. I don’t think they fully realised that there were going to be lots of other issues around not just work but health – people might have a relapse, struggle with motivation, or be on medication – there’s a whole lot of stuff around that.”

Small-Scale Efficiency

The closure of the cafe has forced a rethink in strategy, and Myers-Davis says the answer has been a suite of smaller-scale micro-enterprises that represent a more efficient way of doing things, including rubbish removal and car washing services.

“We’ve used our learning out of the big stuff that we’ve done to take that right back to really really small,” she says.

“The car wash business just started when we decided that instead of sending our cars out to be washed, we said we’d use the money we spend to get them washed to pay a job seeker to wash them. It was money we’d be spending anyway.

“You don’t have to have a massive operation. And that’s probably the biggest lesson. We invested a lot in hospitality and to have that pulled out from under your feet because of a change in funding is pretty difficult. This is more of a commercial reality where we’ve actually seen a need. All it cost us was water buckets and soap and the hourly rate of the paying the guys washing them.

“Now we’re thinking what else we can offer. Even in our own workforce, we’re looking at getting trainers to come in and give some administration training and then getting some people to come in and work in our admin team.”

An op shop truck sitting unused on some days of the week has proven to be an opportunity as well.

“Because we only do pickups twice a week we’ve just secured a contract with a community housing provider to remove all their rubbish on the other days of the week. They were just paying a private operator. It means we can employ three people out of that.”

“We aim to break even as the goal is to pay wages to people at award rates.”

Next on the agenda at Prahran Mission is another micro-enterprise – one that sits at the heart of their mission to get people with a mental illness into work and draws on the different streams already in operation.

“We’re about to start up a new social enterprise job seeker model which is about helping people become more job ready. You get industry tasters, you might do some weeks in the car wash, then some weeks in rubbish removal for example. While you’re doing that we’ll have some classroom-based learning as well and then monitor people to see if they need any extra training.”

From her experiences, Myers-Davis has some simple words of advice.  

“If organisations are thinking of doing something, start off really small. Do stuff that you’re already doing just becomes a natural next step – we’ve certainly built on what we've learnt.”