Business success without profits

A campaign group as well as a business

The business world has always been at best competitive and at worst cut-throat, but not all companies exist solely to rack up huge profits. The BBC's Ian Jolly reports.

While the dot.com billionaires grab the headlines, there are still operations which eschew traditional capitalist values and chase alternative goals.

In Brighton, Magpie Recycling started in 1989 with a few volunteers offering facilities for residents to pass on their old bottles, cans and paper.

Today the business employs 30 full-time and part-time workers and has a turnover of £600,000.

Johnson: growth comes from reinvestment

Annual growth is running at about 25%, but the aim still remains the same as when the company started - to achieve zero waste.

Magpie is both a limited company and a co-operative.

Any surplus is ploughed back into the business or used to give small bonuses to the employees.

"As we're a co-operative, people mix in and enjoy what they do and take part in the decision-making process," says development manager Paddy Johnston.

"We would like people to be paid more than they are at the moment and we're working on that, but hopefully it's a good quality job."

Expanding business

It has gradually expanded to provide collection facilities to 5,000 households in Brighton and Hove which pay a subscription.

It also collects paper from offices and has a furniture recycling arm, which redistributes unwanted items to those living on low incomes or benefits.

Magpie originally operated from council-owned premises, but now has its own base.

It also has a fleet of electric vehicles, the latest being a 7 tonne truck built by the company at a cost of £25,000.

Paddy Johnston says Magpie sees itself as a campaign group as well as a business, although he concedes that the two sides can sometimes conflict.

And not adhering to traditional business strictures can bring its own problems.

As it has no shares, raising capital can be difficult.

Banks also tend to look at its lack of profits and unusual asset base and can be unwilling to lend money.

Mr Johnston does not measure the business in terms of simple financial turnover, but is keen to see its current growth rate continue.

"Profitability is important but it's not the most important thing," he explains.

"Obviously we need to make money to reinvest and grow the organisation."

"At the moment in this country we have an average recycling rate of 8%. In my mind, that should be 80%, so in theory we can grow a huge amount."

Growing movement

Magpie is by no means alone. About 300 organisations come under the umbrella of the Community Recycling Network, a non-profit making society which promotes community waste management in the UK.

Some operations are literally one man and a van, others are highly organised businesses employing 200 people, in Avon a network of companies provides recycling for 350,000 households.

One very successful venture has been Create, a Liverpool-based project, which repairs domestic appliances to sell them on.

It takes people out of unemployment and trains them in the skills required.

Most reach NVQ qualification standards, and 66% of trainees have gone on to find full-time employment.

Thousands of washing machines, fridges and dishwashers are renovated and made CFC safe each year.

The majority are sold to families on low incomes, adding a further social dimension to the business.

Turnover last year was £680,000, with the surplus being reinvested in the business. Create is now also operating a base in Tottenham in north London.

"We very much see ourselves as a social business now," says general manager Adrian Owens.

"Our trainees are paid a fair day's pay for a fair day's work and we have to achieve business objectives such as sales to ensure our enterprise survives.

"We're looking for people here who come with a spark of motivation. If there's a spark, we can light their fire."