Recently I was asked to write a piece on the role citizens can play in the development of renewable energy and energy efficiency in the transport sector, using The Big Lemon as a case study.
This is what I wrote. I’d be really interested in your comments!
Introduction
In 2012 our total energy consumption from transport in the UK was 53 million tonnes of oil equivalent, or about 36% of the UK total (2012 figures).1 The total carbon footprint of the sector was 117 million tonnes of CO2, or about a quarter of the UK total.2 It is clear then, that in order to reduce our energy use and our carbon footprint that we must look at ways to reduce the energy consumption of the transport sector.
But how do we do that? There are a number of things we can do: reduce the number and length of journeys we need to make (for example by moving nearer to work, working from home, shopping locally etc); changing the way we travel (walking and cycling more, using the bus and train instead of the car); and improving the efficiency and sustainability of the vehicles we use.
In the autumn of 2006 a group of people met up in a pub in Brighton to explore ideas for a community bus company to tackle some of these issues. It was the first time most of the people in the room had met each other, having been invited by posters and an article in the local paper, and the group included community activists, businesspeople, bus drivers, pensioners, local politicians, residents and a few journalists.
It was an interesting and fruitful discussion, and by the end of the evening there was a plan. There was even an offer from one of the bus drivers in the room to drive the first day of service for nothing.
Over the course of the next few months, The Big Lemon bus company started taking shape, and on the 1st September 2007 the first service was launched between the university campuses and Brighton Railway Station using three buses powered by waste cooking oil from local restaurants.
Since that day The Big Lemon has become a respected local provider of sustainable transport, running all the transport for the University of Brighton as well as services for Brighton & Hove City Council. The firm is a Community Interest Company and is funded wholly by members of the community through the selling of shares and bonds. As well as bus services, The Big Lemon runs private hire coaches, a music festival coach service and (new for 2014!) an alternative UK tour called Britain By Bus.
The Big Lemon has been recognised as an innovator and change-maker with local, national and international awards such as Best Sustainability Initiative (Brighton & Hove Public Service Awards 2010), Best Social Enterprise (EU Ethiconomy Awards 2011), Best in Responsible Transport (Responsible Tourism Awards 2012), and Social Enterprise of the Year (Sussex Business Awards 2013).
Through its activities The Big Lemon has provided a local, sustainable use for over half a million tonnes of waste cooking oil and by using this as a fuel instead of diesel has saved almost a million tonnes of CO2 emissions. Through its partnership with the University of Brighton it provides a free bus service for staff and students between campuses, allowing the University to have a car-free policy for students and significantly reducing the number of car journeys made between these sites.
So how does one go about developing initiatives to run local bus services and other transport on renewable energy? We will look at seven steps for developing your own community sustainable transport operation.
1. A strong vision
“Our Vision is of a future where our society is no longer reliant on the car. A future where everyone has access to affordable, convenient, comfortable and reliable public transport. A future where people care about each other and about the world we live in, and endeavour to leave the world a better place for future generations” The Big Lemon’s Vision Statement.3
It’s important to know from the start what you’re aiming for. The Big Lemon made it clear it was aiming for a better future for the next generation. That gives it a sense of purpose, and guides strategy. It gives a test – for everything we do, we can ask “Is this helping us provide a better future for our children?”
A strong vision is important not only to guide people within the organisation – it is equally important to give everyone else an idea of what you’re about too.
2. Clear messaging
“Life should be fun. We aim to enjoy everything we do, and make sure everyone involved enjoys it too. Our customers should have the best possible experience on our buses; our staff should have the best possible time at work, and our investors should feel proud that it is all possible because of them. We also try and minimise any negative effects on the environment, and ensure that we always do our best for the wider community.” www.thebiglemon.com/aboutUs/howWeWork
Effective communication of your values, your brand identity and what you stand for is essential. The Big Lemon quickly became known as the local eco-friendly bus, not because thousands of pounds were spent on an advertising campaign (they weren’t!) but because at every opportunity it was made clear that the organisation exists to make public transport better to attract more people out of their cars, and that the buses run on waste cooking oil to minimise their carbon footprint.
3. Community buy-in
“Community is a big part of life at The Big Lemon. We are owned and run by members of the community and actively encourage members of the community to buy shares in the company. We regularly get out and about to talk to members of the community and host public meetingswhere people can come and discuss their thoughts, ideas and concerns with us and other members of the community.” 4
As mentioned earlier, The Big Lemon started life in a pub in Brighton, where a group of strangers came together to talk about how to run buses in a more sustainable, more effective, and more community-orientated way. None of the people in that meeting had run a bus company before. What brought them together was a shared desire to see something better. A number of members of the public who attended that meeting subsequently became shareholders in the company and two became drivers (one of which is now the Director of Operations).
Public meetings are a great way to get community buy-in. The Big Lemon has held public meetings in pubs, university campuses, a church, and on the buses themselves. Public meetings are a very effective way of getting people ‘on-board’ because not only do the discussions invariably generate some brilliant ideas, meetings also show the community at large that you’re serious about listening to people, involving them in decision-making and working with them to improve the service.
There are also a number of other methods available to build community support, and it’s important that different methods are used in order to get buy-in from different sections of the community. The Big Lemon’s meeting in Ovingdean church did not attract many people below the age of 40. On the other hand, The Big Lemon’s Facebook group 5 does not have many members over the age of 40.
In order to get community buy-in, you need to get embedded in the community. Try as many different media as you can to get your message across and build support. Local pubs, churches, community centres, newspapers, magazines, radio stations, networking events, online forums and social media networks are all good places to become embedded in your community. One is not necessarily better than another; you need to use them all!
Once you’ve built a relationship with your community and you have a network of supporters you need to keep them! The best way to do this is to keep them informed. Take the email addresses of people who come to meetings and ask them if it’s ok to add them to your mailing list. And don’t then use your mailing list to try and flog travel passes and such like – use it to keep people with you on your journey. In the beginning The Big Lemon sent out news every month, updating people on developments: getting the operator’s licence, the first route, the first bus, the first driver… it’s all very exciting and people will want to stay in the loop all the way! Now email news is sent out less frequently, but instead The Big Lemon’s Facebook group (facebook.com/groups/friendsofthebiglemon) and Twitter page (@thebiglemon) are updated every few days with the latest news, views and other stories
4. The right legal structure
“A Community Interest Company (CIC) is a limited company, with special additional features, created for the use of people who want to conduct a business or other activity for community benefit, and not purely for private advantage” Community Interest Company Regulator 6
The Big Lemon is a Community Interest Company limited by shares. This means it can sell shares in the company in order to raise finance, but there are legal limits on dividend payments, and the assets of the company are only to be used to further its social objectives. The Big Lemon chose this model in order to safeguard its aims in law while also allowing it to raise finance from members of the community by selling shares.
Incorporation as a Community Interest Company (CIC) is subject to agreement by the CIC Regulator and must be renewed each year by means of an annual Community Interest Company Report, and if the CIC Regulator is no longer satisfied that the Company is working for the benefit of the community it can withdraw its CIC status. This means that at all times the public can be confident that the organisation is being run in accordance with its mandate, true to its original vision, mission and values. Thus incorporation as a CIC makes an organisation immediately recognisable as a social enterprise working for the benefit of the community.
There are, of course, many other models available, and what works for one does not necessarily work for another. Brighton is a hotbed of successful social enterprises, some of which are CICs, some of which are co-ops7 and some of which are Industrial Provident Societies8. For more information on types of social enterprise and how to set one up, see “Setting up a social enterprise” on the Government website GOV.UK.
5. A good funding model
The best things in life are free
Anyone starting a social enterprise, or any kind of business, will soon realise that funding will be one of their biggest challenges. For start-ups, there are a number of grant-funding bodies, UnLtd10 being one of the best known examples for social enterprises. These grants are very highly contested, making them very difficult to win, but if you can find a grant that looks suitable for what you have in mind and invest the time in a good application, you may get lucky!
Here are some golden rules of applying for grants:
- Don’t waste time applying for grants that are not suitable. Most grants have very clear aims and elibility criteria – read them thoroughly and don’t be tempted to try either changing your project to fit the grant or describing your project in a misleading way to fit the grant criteria!
- Prioritise it! Grant applications are not something you can do by candlelight a couple of hours before the deadline.
- Don’t think you have to fill the word limit. It’s a maximum, not a target!
- Think positive. If you believe in it, others will too!
- Avoid ‘hoping’, eg “it is hoped”, “we hope”. It sounds a bit hopeful, doesn’t it?!
- Keep answers succinct and to the point. Assessors don’t have much time for each application and don’t like waffle.
- Be specific. If the question is what is your vision, don’t just list a load of things you’d like to see. Say “Our vision is for X group of people to do Y and achieve Z”.
- Always go the extra mile with an answer. If the question is “Who’s going to be responsible for project delivery?” make sure you include in your answer the individual’s name, job title, qualifications, experience, brief, who they have worked for and why they were chosen as the lead person for project delivery.
- Think about what other grant applicants are going to say and try and make yours stand out. If the grant is for getting people back into work, don’t simply say that your potential client group is largely from low income backgrounds with few opportunities. This may be true and is definitely worth pointing out, but many other applicants are going to be saying this too. What makes your group stand out? Why is your project better?
- Proof-read! Or better still, ask someone else to proof-read. You’re unlikely to lose marks for poor English but poor spelling and grammar give a bad impression and you want to make a good impression, right?!
There are a number of reasons too why grants may not be the best way to fund your initiative. The downside of grants is that they are time-consuming to apply for, highly contested, and if you’re lucky enough to win a grant they may have onerous conditions that are time-consuming to fulfil and reduce the time and energy available for developing the project. You should also be careful that the business model does not rely on grants for very long. Grants are very helpful at the start, but you don’t want o become reliant on them.
The Big Lemon found the most effective way of raising finance to be selling shares to members of the community. Obviously this is only possible if your legal structure allows it, and this is something to consider when choosing your legal structure (see 4 above).
However what works for one doesn’t necessarily work for all, and there are a number of other types of funding to consider:
- Loan-funding: ex-Dragon’s Den star Doug Richard’s School for Startups 11 offers a very good Government-backed scheme giving start-ups affordable loans with mentoring, training 24-hour business support all included in the package.
- Crowd-funding: this has grown in popularity recently and is now responsible for some hugely successful campaigns. In a nutshell you start an online campaign and ‘woo’ potential investors with your offer. Campaigns are time-limited and you set yourself a target. Usually, if you fail to reach your target within the timeframe the whole thing falls. There are many sites; some of the most popular are indiegogo.com, crowdfunder.co.uk, buzzbnk.org and kickstarter.com
- Peer-to-peer funding: another fast-growing sector. As with crowd-funding you bypass the banks but unlike crowd-funding you don’t need a campaign and you don’t need a target. You apply in the traditional way, but because peer-to-peer investors are more accepting of risk you might have a more sympathetic ear to talk to and the interest rate might be better than that of a bank. Popular peer-to-peer sites include ThinCats.com, Zopa, Funding Circle, RateSetter and Assetz SME Capital
Without doubt, however, the best funding model is revenue. Social enterprises are enterprises, and need to be funded in the long term by selling, just like any other enterprise. You should plan for the business to be funded from revenue as early as possible, and if you borrow less (or not at all!) at the beginning it will make life much easier later on.
A relatively low-risk funding model is to work with partners to provide services on their behalf. There are many organisations that may be interested in outsourcing their transport, and with sustainability higher up on the public sector and corporate agendas a sustainable transport organisation may be just what they’re looking for. However the biggest problem with this approach in the early days will be credibility. With no track record you’ll have difficulty convincing partners that you’re up to the job, unless you have some good industry people on your team. The best strategy would be to start with something very modest and manageable, make an impact, get a name for yourselves and then get ambitious!
6. The right people
“I want to compliment you on a fab service. The bus driver was particularly helpful. Thanks again and please do let the driver know what a great job he’s doing, the personal service makes all the difference and I will be using you as often as possible in the future” Kelle Kingsley, Passenger on The Big Lemon
When The Big Lemon started out, it was clear that the unique selling point wasn’t going to be the brand new fleet of vehicles, or the state-of-the-art visitor’s centre at the depot. The company operated three rather old vehicles (only one of which actually belonged to The Big Lemon) from a car park on the edge of an industrial estate. There was no office, workshop, power or running water on site, just an old van with fuel, oil, water and an assortment of cleaning materials, tools and spares in the back. What was lacking in finance, facilities and equipment had to be made up for tenfold by offering the best customer service in town.
During recruitment, the first thing that The Big Lemon looked for was the right attitude. If people have an open mind and a positive outlook, everything else can be taught.
Your team is your best asset, and whether or not you provide a good service will depend on them. You should look for people who
– are positive and enthusiastic
– have an understanding of what you are trying to achieve and are willing to work towards the same aims
– enjoy working with the public
– are good team players
– take pride in their work
– smile a lot
You should try and avoid people who
– know it all
– have done it all before
– talk about passengers as if they are a problem
– do not enjoy their work
The Big Lemon has an amazing team. Drivers are trained to give the best possible customer service, and make a point of greeting everyone when they get on, and acknowledging them when they leave. It’s so easy nowadays to complete a transaction with a shop assistant or a bus driver without even making eye contact, so when you make a point of doing these little things it makes a world of difference to the service.
7. A good marketing plan
Positioning:
Price – how does your price compare with competitors?
Product – what’s your level of product quality?
Market – how do you describe your customers?
Service – what degree of service do you provide?
The first thing you need to think about is positioning your service. Is it a high-end service, budget, or somewhere in the middle? The point Darren makes in his blog is that what matters most is that your positioning is aligned.
Travelodge has been very successful providing a low quality product at a low price, targeted at people on a low budget. Conversely, the Ritz has been very successful at providing a luxury service aimed at very wealthy people willing to pay a lot of money. If a hotel chain tried to offer a Ritz service at a Travelodge price, they would go bust very quickly even if their hotels were always full, simply because the revenue would not be enough to cover the costs of the quality services they provide.
What you should also consider is leading on one of these. It’s too complicated to communicate your position in all areas – you need to choose one and make sure the others are aligned with it. Ryanair, for example, is all about Price. Apple, on the other hand, is all about Product. STA Travel is a good example of a market-focussed business, offering flights, accommodation, insurance and all manner of other things specifically to students and young people. And as for service businesses, high-end hotels like the Ritz are among the best examples.
Some businesses have a combination. Long-haul flights for example will have Economy, where price is the most important thing, and First or Business Class, where service is most important.
Positioning is not fixed, however. The Big Lemon initially positioned itself at the budget end of the market, and was very successful at growing market share amongst price-conscious students. In 2011 this was noticed by the major competitor, who responded by cutting their fares on routes competing with The Big Lemon. The Big Lemon had to change, and change quickly. A price-war was out of the question, as the competitors had deeper pockets and would be able to run loss-making services for longer. After a lot of experimenting and a very difficult year, The Big Lemon stabilised its services with a slightly different model, and revised positioning. Now the company runs services on contract to the University of Brighton and to Brighton & Hove City Council, and has positioned itself closer to the middle of the spectrum because that is where the demand is from the funding partners.
Once you’ve decided on where to position your service, you need to identify good marketing and distribution channels. How and where will you advertise your services? Where will you sell them and how will people pay for them?
The Big Lemon’s experience is that the best place to start answering these questions is to identify the community you are planning to work with. At the beginning it was the student community. This was a lively and open-minded community, mostly living in the same areas with the same travel needs. The community had clubs and societies, a weekly newspaper and its own radio station. It had Freshers’ Fair and a huge number of other events throughout the year. It was a well-networked community, with online groups on Facebook and other sites, and a number of well-read blogs. The Big Lemon got stuck into all of these things, building relationships with as many groups as possible. The key message was ‘cheap, eco-friendly bus with a cool bus driver’ and it worked.
Once you’ve identified your target community, you need to think about whether you’re going to sell direct to the passenger, or establish a partnership with a funder to provide the service on their behalf. If you sell direct to the passenger you should think about the ticket types you will offer, and where and how to sell them. The Big Lemon had a membership who paid annually, and then on top of that sold a range of different types of ticket, in a number of different types of outlet. There were daily and weekly tickets available on the bus, six-journey passes sold in campus shops, and three month and 12 month passes available on the internet. Paying daily on the bus was the most expensive option, and then the more passengers were willing to commit the cheaper the deal became. Advertising the service and the deals on offer was done on the buses (both outside and in), on our website, Facebook group, Twitter page, at Freshers Fair, in the student shops, and in students newspapers and magazines. The company also took advantage of cross-selling opportunities; for example selling coach tickets to music festivals to the student audience already using the bus services, and private coach hire services to the student clubs and societies.
Now, with its new model, the bulk of The Big Lemon’s business is not sold directly to the passenger but instead the company provides bus services on behalf of both the University of Brighton and Brighton & Hove City Council. This is more secure and enables better planning – as revenues are guaranteed as long as the service is provided as contracted. The downside is there’s less freedom, but in reality you can still run the service in your own style so it’s a small price to pay and well worth exploring.
In the case of The Big Lemon’s services for University of Brighton students and staff, funding from the university allows the company to operate the service free at the point of use. This significantly increases take-up and allows The Big Lemon to better fulfil its aims in terms of reducing the number of car journeys and thereby reducing energy use, pollution and CO2 emissions.
Conclusion
We have been looking here at the role citizens play in the development of renewable energy and energy efficiency in the transport sector. Transport is not the first thing that comes to mind when people thing of energy generation, energy use and energy efficiency, but as we saw at the beginning, transport is responsible for 36% of total energy consumption in the UK. If we are serious about reducing our energy use and moving to more sustainable sources, the transport sector must play its part. And just as communities up and down the UK are launching community-owned renewable energy schemes they are also ideally placed to launch community-owned sustainable transport initiatives too.
In order to give such initiatives the best chance of success, they need:
- A strong vision
- Clear messaging
- Community buy-in
- The right legal structure
- A good funding model
- The right people
- A good marketing plan
Obviously there is a lot more to it than the above: they also need vehicles, fuel, maintenance and cleaning facilities, parking, insurance, an office… and of course there is the question of whether the vehicles are powered with biodiesel from waste oil, biogas, or renewably-sourced electricity. For more information on setting up a community sustainable transport operation please have a look at Community-led Transport Initiatives Action Pack published by Local United (April 2011).
Whether for interest or practical use, hopefully you have found this informative and useful. Feel free to share, and if you have any questions the team at The Big Lemon will be very happy to help.
References:
- DECC: Energy Consumption in the UK (2013) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/238795/chapter_2__transport_factsheet.pdf
- DECC: 2013 UK Greenhouse Gas Emissions, Provisional Figures and 2012 UK Greenhouse Gas Emissions, Final Figures by Fuel Type and End-User
- https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/295968/20140327_2013_UK_Greenhouse_Gas_Emissions_Provisional_Figures.pdf
- http://www.thebiglemon.com/aboutUs/howWeWork/Philosophy
- www.thebiglemon.com/aboutUs/howWeWork/Community
- www.facebook.com/groups/friendsofthebiglemon
- http://www.bis.gov.uk/CICREGULATOR
- For more information on Co-operatives, visit: http://www.uk.coop/start-co-op
- For more information on Industrial and Provident Societies, visit: http://www.fsa.gov.uk/doing/small_firms/msr/societies
- https://www.gov.uk/set-up-a-social-enterprise
- www.unltd.org.uk
- https://www.schoolforstartups.co.uk/launcher/government-funded-10k/?gclid=CO2MjdqKlb4CFe3JtAodZzcAUw
- http://www.shirlawscoaching.com/_blog/Driving_business_performance/post/assessing-your-brand-in-two-quick-steps-part-one/#.U2eOcYFdWSo
- Further Reading: Local United: Community-led Transport Initiatives, April 2011: www.localunited.net
Resources:
- Social Enterprise:
- Social Enterprise UK: www.socialenterprise.org.uk
- Co-operatives UK: www.uk.coop
- Local United: www.localunited.net
- Transition Network: www.transitionnetwork.org
- REconomy Project: www.reconomy.org
- Social Enterprise Mark: www.socialenterprisemark.org.uk
- The Big Lemon: www.thebiglemon.com/contactUs
- Grants:
- UnLtd: www.unltd.org.uk
- School for Startups: www.schoolforstartups.co.uk
- Ashden Awards: www.ashden.org
- Awards for All: www.biglotteryfund.org.uk/funding/Awards-For-All
- The Big Lemon: www.thebiglemon.com/Grants
- Crowdfunding:
- Indiegogo: www.indiegogo.com
- Crowdfunder: www.crowdfunder.co.uk
- Kickstarter: www.kickstarter.com
- Buzzbnk: www.buzzbnk.org
- Peer-to-peer lending
- ThinCats: www.ThinCats.com
- Zopa: www.zopa.com
- Funding Circle: www.fundingcircle.com
- Rate Setter: www.ratesetter.com
- Assetz SME Capital: www.assetzcapital.co.uk
Swimming upstream 