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What is a social enterprise and why should you consider it?

If you are considering developing an enterprise in your community or organisation a social enterprise could be the way forward if you wish to use it for social good and demonstrate to others your intentions.

Various charities, housing associations, community groups and profit making businesses I have worked with have used social enterprise as a way of differentiating a new enterprise project from other elements of their work.  It’s not about the ‘what’ element of your business but the ‘why’ element.  If your ‘why’ – the reason for starting the enterprise – is to add social value, carry out social good or use the profits of the enterprise to support other social activities then a social enterprise is a great business model.

Social Enterprise UK defines social enterprise as:

“…businesses that trade to tackle social problems, improve communities, people’s life chances, or the environment.  They make their money from selling goods and services in the open market, but they reinvest their profits back into the business or the local community.”

Charities, private businesses and public sector organisations can all operate social enterprises.

Social enterprises usually have the following characteristics:

  • A clear social and/or environmental mission
  • Generate the majority of their income through trading goods or services
  • Reinvest the majority of their profits into the business or other activities for social value.
  • Cover their own costs in the long-term
  • Pay reasonable salaries to their staff
  • Are accountable and transparent

A social enterprise doesn’t:

  • Exist to make profits for shareholders
  • Exist to make its owners very wealthy
  • Rely on volunteering, grants or donations to sustain itself in the long-term

Some examples of great social enterprises include:

Age UK has established a commercial services arm, Age UK Enterprises, which provides over 15 products and services including energy services, home and travel insurance, to over 1.1 million customers.Some examples of social enterprises:

Autism Initiatives Social Enterprises are designed to help people with autism gain meaningful and engaging work experience whilst developing skills to take them from training into employment. All profits raised through these enterprises are reinvested into realising the aims of Autism Initiatives, and providing further opportunities to their service users. Projects include: a bike recycling project in Liverpool, a café in Southport, The Gallery on the Corner in Edinburgh fully represents and supports inclusive artwork produced by artists who have autism or other disabilities and a chocolate factory, Chocolate Memories, in Belfast.

From Babies with Love Foundation sell organic baby clothes online. 100% of profits are given to charities supporting orphaned and abandoned children in Africa, Asia, the Middle East, Europe and the Americas.

Thinking of setting up a social enterprise? Contact me to discuss how I can work with you and your team to develop your social enterprise ideas.

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