What is it about a job that fans the flame inside you? The obvious answer is money—a healthy bank deposit at the end of the month is a primary motive for working. For others it’s about achieving something meaningful; helping society and feeling rewarded in passion, not pounds or dollars or whatever currency you get paid in.
But what if you could have the best of both worlds? Social enterprises are an innovative way for entrepreneurs to build their own business and make a change in society, too.
So, how do you break the barrier and turn a social enterprise into a successful business? Doing good and making money are two odd gloves; pairing them takes clever, forward thinking. Once you master both, your venture will have the chance to create sustainable, positive change.
As much as we don’t want to admit it, traditional charity collection has a stigma attached to it. One glance of someone soliciting for donations in the city center and we tend to dart off in the opposite direction.
Of course, you don’t always get away! Clipboard in hand, you’re suddenly confronted with “Seven million children die every year—do you think that’s right?”
Please, just take my card details and refrain from the public crucifixion, will you? And if you glide past, blithely rejecting their emotional ploys, you feel like some kind of modern-day Hitler.
That is, of course, an over-exaggeration, but there is something about collection boxes that make us uneasy. You can’t change that, but you can take a different approach to changing the world, and that’s by entering the world of social enterprise.
Rules for doing good
Peter Holbrook CBE, chief executive of Social Enterprise UK, is feverishly passionate about social and environmental justice and has high hopes for the sector. So what’s his advice for startups?
“Just get on and do it, but do so with realistic income and cost forecasts,” he advises, “On the whole it’s wise to halve your income expectations and double your costs – if it still works then you have a chance at making your business work.”
He’s keen to remind social “wantrepreneurs” that the richness of rewards that running a social enterprise brings do not always come in £ or $ notes.
“Profit can come in many ways and it’s absolutely been the best thing I’ve ever done,” Peter says, “It’s enriched my life, paid me well, taught me loads, and (with the help of many) transformed the lives of hundreds, probably thousands of people. Few careers can combine the freedom and excitement of entrepreneurialism alongside the creation of wide scale social change; whether it’s in your neighborhood or around the world.”
Getting a social business off the ground has never been easier. Social Enterprise UK aids entrepreneurs in kickstarting their projects; with continuous support once the enterprise is off the ground. Before you get started, of course, you’re going to need the passion. Are you hungry for social change? Do you have the business head needed to run a company? Yes? Let’s continue.
What’s inside a social enterprise?
The ingredients that make a social enterprise work have quite a different taste to that of a traditional business.
First off, you should have a clear mission set out in your governing documents; whether it’s a social venture or an environmental quest, all your choices should be controlled in the interests of this mission.
As Anne Frank once wisely said: “No one has ever become poor by giving.” Social enterprises generate the majority of their income through trade and reinvest most of their profits.
The cherry on top? Honesty.
A trustworthy social enterprise is one that’s accountable and transparent—qualities even more important if you’re aiming for profit.
As previously mentioned, the primary goal is your social mission, but the corporate world doesn’t necessarily need to know that.
For the love of business
Look at Indosole, for example. The idea for the company came about when two surfing Californians took a trip to Bali, Indonesia, in 2004. The horror of the pollution there troubled the two co-founders, and they created a solution in the form of stylish, funky sandals made from repurposed Indonesian motorcycle tires.
For every two pairs of shoes Indosole sells, it prevents one tire hitting a landfill; meaning cleaner air for the community. The company also invests in Balinese workers by fundraising for children to attend school. From their storefront, however, you don’t see a charity. You see a hip, superior product—and that’s what makes a magic social enterprise.
Investors will no doubt love the aspect of doing public good, but that’s not going to give them results. You must be practical about your business model in a for-profit organisation.
Fundraising alone is fragile—having a fantastic product or service offers solid revenue and a steady flow of customers, rather than relying on donations. Sure, you’re making a profit, but you’re making a difference, too. And that’s a beautiful thing.
Do you have advice for entrepreneurs looking to start a social enterprise? Share it with us in the comments below.