Welcome to Social Entrepreneurship
In this module you will find lots of useful information to help you become a social entrepreneur including; What a social enterprise is, the people involved, the structures and legal requirements, how to get organised and find funding. We think the Case Studies in Step 5 cover this in detail.
Before that you might want to work through Steps 1-4 in order to familiarise yourself with the basics of definitions, how to set a social enterprise, who to talk to and watch our interviews with inspiring people in Lewisham and across London. Most of the detailed information about What is a social enterprise you can find under the Definition tab above.
British Council on Social Enterprise
You will have seen the opening film from the School of Social Entrepreneurs. They are based in London but started in Deptford Creekside in Lewisham.
What is a Social Enterprise?
The European Commission itself, in the Social Business Initiative (2011-14) (PDF) defined a social enterprise as follows;
A social enterprise is an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner and, in particular, involve employees, consumers and stakeholders affected by its commercial activities
As Wikipedia puts it
“A social enterprise is an organization that applies commercial strategies to maximize improvements in human and environmental well-being – this may include maximizing social impact rather than profits for external shareholders”
The Social Enterprise
However in the UK, with its long tradition of the Welfare State and the public provision of services, the definition is slightly different;
Social enterprises are 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.
Make it #LocalGood – Local Stories of Social Enterprise –
Definitions used by the Skoll Centre for Social Entrepreneurship (Oxford University) and the Social Enterprise Coalition in the UK.
Social entrepreneurship is the product of individuals, organizations, and networks that challenge conventional structures by addressing failures – and identifying new opportunities – in the institutional arrangements that currently cause the inadequate provision or unequal distribution of social and environmental goods.
Social entrepreneurship has three key characteristics: sociality (in the public benefit), innovation and market orientation.
Social enterprises are businesses trading for social environmental purposes. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose is central to what they do. Rather than maximising shareholder value their main aim is to generate profit to further their social and environmental goals.
Social enterprise is a business model which contributes to a more sustainable society by offering the prospect of greater equity in economic participation
What is Social Investment (UK trade and investment)
FAQs Good list on a range of issues, Social Enterprise UK
Ethical; Community-owned assets NZ resource
Rural; Developing Rural Economies; UK report on LEP development in rural communities. Has a useful benefits table at the end
Accreditation; Social Enterprise Mark UK – standards for a Social Enterprise to achieve
ZOP Space – Creating a place of belonging and well-being
39% of Social Enterprises start in Deprived Communities
What it means to be a SE (from EMES)
EU Study on practices on Social Enterprises in Europe
There was a thorough and useful pan-European report on social enterprise across Europe published in 2007. This neatly reflects the current circumstances of economic transition and change, because no two countries treat social enterprise in quite the same way, nor is there a standard definition; indeed in France the term “social economy” is used.
Characteristics of a social enterprise
- Fulfils social goals
- Addresses a target population in need
- May operate under various legal forms
- Deals with voluntary Social work
- Has a non-profit orientation or reinvests profits
- May receive public funding
- Continuous activity of the production and/or sale of goods and services (rather than predominantly advisory or grant-giving functions).
- A high level of autonomy: social enterprises are created voluntarily by groups of citizens and are managed by them, and not directly or indirectly by public authorities or private companies, even if they may benefit from grants and donations. Their members have the right to participate (‘voice’) and to leave the organisation (‘exit’).
- A significant economic risk: the financial viability of social enterprises depends on the efforts of their members, who have the responsibility of ensuring adequate financial resources, unlike most public institutions.
- Social enterprises’ activities require a minimum number of paid workers, although, like traditional non-profit organisations, social enterprises may combine financial and non-financial resources, voluntary and paid work.
- An explicit aim of community benefit: one of the principal aims of social enterprises is to serve the community or a specific group of people. To the same end, they also promote a sense of social responsibility at local level.
- Citizen initiative: social enterprises are the result of collective dynamics involving people belonging to a community or to a group that shares a certain need or aim. They must maintain this dimension in one form or another.
- Decision making not based on capital ownership: this generally means the principle of ‘one member, one vote’, or at least a voting power not based on capital shares. Although capital owners in social enterprises play an important role, decision-making rights are shared with other stakeholders.
- Participatory character, involving those affected by the activity: the users of social enterprises’ services are represented and participate in their structures. In many cases one of the objectives is to strengthen democracy at local level through economic activity.
- Limited distribution of profit: social enterprises include organisations that totally prohibit profit distribution as well as organisations such as co-operatives, which may distribute their profit only to a limited degree, thus avoiding profit maximising behaviour.
What is a social enterprise? (SENS)
ClearlySo – What is a social enterprise?
This potentially helpful infographic from ‘ClearlySo’ who claim that their vision is ‘of a world where the financial system is a powerful force for good and the impacts of businesses are considered in all investment decisions.’ The blog entry is discussing whether social enterprises should be considered on a spectrum alongside not for profit and profit based businesses.
The Telegraph – ‘What is a social enterprise?’
This article sums up with the following steps:
- They want to change the world
- They’re not in it for the money
- They’re mould breakers
- They’re meeting a need
Although focusing mainly on Canadian laws etc, this website is offering simple and concise definitions of what social enterprise is on a global and general scale.
- ‘Social enterprise applies an entrepreneurial approach to addressing social issues and creating positive community change.’
- A social enterprise is a business that uses entrepreneurial methods to accomplish social goals and/or feed profits to a parent charity or non-profit to enable it to fulfill more of its own social mission.
- A social enterprise is a revenue-generating business with primarily social objectives whose surpluses are reinvested for that purpose in the business or in the community, rather than being driven by the need to deliver profit to shareholders and owners.
CHANGE- How social enterprises have changed the world:
- Infographic on Current social enterprises that are changing vast parts of the world, with links to said businesses.
- B) Interesting infographic about inspiring modern entrepreneurs (click to launch long infographic on 6 inspiring entrepreneurs)
- C) Understanding social enterprise infographic (click to launch infographic)
This is a very interesting infographic purely for the figures on the right hand side of the piece:-
- ‘63% of social enterprises around the world are profitable with a median earned annual revenue of $1,104,267 and a median of 18 employed staff per organisation.’
- ‘Globally woman play an active role in the social enterprise sector, even in the regions where women traditionally don’t have business leadership opportunities.’
Top Tip! from Hamilton House, Bristol
“Don’t wait for the money!!!”
9 key tips from Alistair Sloan of the living furniture project
Overview; It’s one of our advantages, as social entrepreneurs, that people tend to like what we’re doing. A few weeks ago, a friendly London taxi driver asked me what I did for a living as he took me home, and I explained that the company I’d just started employed homeless Londoners to make furniture using reclaimed materials.
He seemed pretty enthused about the idea – so enthused that when he picked up his next late-night fare, he told his new passengers about the Living Furniture Project, and kept his breathless description (and my free sales pitch) going for almost the whole trip home. It was only towards the end that his fare was able to squeeze a few words in: “Yes, we know that guy. He’s our housemate.”
Luckily, people’s instinctive appreciation for what many social entrepreneurs do is something that works very much to our advantage. Our stories can inspire people to dig deeper and be a little more generous than they would normally be. This can be of special use when you’re starting a business and funds are tight. Getting the right donations – equipment, money or time – can be key to success.
With the Living Furniture Project, I secured three premises rent-free for the first six months, convinced a leading industry brand to give us thousands of pounds worth of tools, asked photographers, website developers, film-makers and PR agencies to help us launch a marketing campaign, and even managed to exhibit at some of the UK’s largest furniture trade shows at no cost.
I didn’t want this article to be about blagging, and some fellow entrepreneurs I spoke to also rejected that word, but I did want to share some tips to pique potential donors’ curiosity and inspire generosity. Starting a business is hard, but, with a little help from your friends, here’s how you can skip some of the set-up costs and get on with the good stuff.
1. If you need something, don’t ask for it (at first)
This holds true for most forms of entrepreneurship: “Ask for money and you’ll get nothing, ask for advice and you’ll get money.”
Unless you’re hanging around outside casinos pestering strangers for cash (and willing to live with the moral consequences), there really is very little chance of finding someone who will hand out money over a speculative social enterprise pitch.
But, if you have access to those people who might be able to help financially, these are probably the kind of people who can also offer advice, networking opportunities, potential sales leads and more.
Talk about this stuff first rather than going in with the pitch for funding because, even if you don’t get money, you’ll get plenty of free wisdom and useful connections. If the conversation between you and the potential donor keeps going, well, you never know where it might end up.
2. You’re doing this, with or without them
Your project needs to go ahead whether you get donations or not. Or at least that’s the impression you should always give. People admire determination, vision and also feel more secure if they know the project doesn’t rest entirely on them (that’s your job, social entrepreneur). So, talk about who else is on board already, talk about what more you could do if they joined in, too.
3. Keep writing short and sharp
Your emails should have no more than three or four lines, punching out exactly what you’re doing, what you’re asking for, what you’re offering in return, and what to do next. Broader details should be in an attachment.
In the attachment (which should absolutely be no longer than one A4 page), use bullet points not prose. Focus on what both of you will get if the donation or partnership goes ahead. Talk about your experience – and your team’s – to re-assure the donor.
4. Be empathetic
It’s important to really understand what your potential donors objectives are. I knew that partnering with two established charities was really important to improve my credibility as a new organisation. I also knew that one of the charities (a large national organisation) was really keen to focus on employability as part of their internal and external marketing campaigns – so I have bent over backwards to ensure they can get access to us whenever they need it.
I have had countless camera crews, photographers and journalists visit the workshop as part of their marketing campaign. Obviously, we get a boost from this, too, but it’s also a great win for that charity. And it means they’re keen to continue the relationship.
Likewise, I make sure an equipment manufacturer who supplies us with tools is sent lots of photos as soon as the new tools arrive. Each time they do a press release, it generates five or six media items for them.
5. Think long-term
Your sponsors’ time is precious. Donating a £500 piece of equipment might seem simple, but, with all the internal processes and accounting issues to get round, especially for larger organisations, it can be time-consuming for the donor for seemingly little return. But, if you can map out what a 12-month partnership looks like – with opportunities for media exposure, event attendance, days out for staff – and then have donations to match that schedule, it starts to make more sense.
6. Your network is bigger than you think
I would rate myself as a good but not excellent social networker – and have around 500 connections on LinkedIn. These 500 connections, between them, are reportedly connected to an additional 120,000 LinkedIn users. That number is surprisingly high, but just reflects how small the world is.
But don’t forget about it in the real world, too. If someone asks you at a social event, “How’s the project going?” reply with: “Great, but I’m still looking for a photographer.” Ask a few times in a month, and you’ll find yourself with a handful of willing volunteers.
7. Crowd fund
Crowd-funding is a great way to take advantage of your social enterprise story. People will instinctively want to share any crowd-funding project you have on their Twitter, Facebook or LinkedIn pages.
Successful crowd-funding relies on a strong marketing campaign, though, so, while this is a good head start, make sure you set aside plenty of time to engage with bloggers and journalists. Consider hiring an intern to help with this.
8. Keep yourself afloat
It’s important to keep what little money you have in the business. Writing opportunities, speaking engagements and consultancy work are three good ways to earn a wage while the social enterprise grows.
9. Be prepared to pay everyone back
Once you’re up and running, it’s not fair to keep asking people for donations. So make sure your donors, especially those who provided services free, are first on the list when you want paid work done. And don’t forget to forecast these costs into your business plan as you grow.
Alastair Sloan is the director of The Living Furniture Project, a social enterprise that employs and trains homeless Londoners to make bespoke furniture.
Do this now!
Find a Social Entrepreneur
Our challenge is for you to find an inspiring, passionate, socially driven, entrepreneur and ask them the following questions.
Why do you do the work you do?
What drives you?
What are your core values?
How did you start?
How much money did you start with?
Whats the future look like?
Jamie oliver 15 training restaurant in Shoreditch
Spitalfields Crypt Trust – Social Enterprises
For 50 years SCT have been supporting people recovering from addiction by helping them to get clean and sober, develop self-respect and hope for a much better future. One of the ways in which they do this is by setting up social enterprises. The following is information about their two main projects, ‘Paper & Cup’ and ‘Restoration Station’.
1 Paper & Cup
‘We run two social enterprise cafes in East London. Our Paper & Cup ‘coffee-bookshops’ provide work experience and employment training for the long-term unemployed and people recovering from addictions. The cafes offer a professional and safe environment where people can grow, learn and move on.’
“I loved volunteering at Paper & Cup. Apart from the formal barista training, it also gave me the opportunity to meet new people and interact with staff, other volunteers and the general public. It’s boosted my confidence and helped me having a structure in my week.”
Quote from former Paper & Cup trainee.
The benefit to the world comes in the form of changing perception and ways in which you encourage people to do good in their lives.
‘Many of the trainees are referred by our personal development and training centre, the New Hanbury Project. Each year, up to 16 people in recovery train as baristas and managers. This has enabled some of our trainees to find jobs with local businesses.’
2 Restoration Station
‘Restoration Station restores vintage and designer furniture from our workshop outlet on Shoreditch High Street. The social enterprise provides training and work experience for people in recovery from addictions.’
This is an interview with one of the workers at the restoration centre, which shows off their work, and shows not only how happy he is with the work that he has made, and his new position, but also how happy the customers are with the produce of the workshop.
The Bristol Skipchen
Here is a great booklet from Social Enterprise UK!
EMES International Research Centre;
Setting up a social enterprise in the UK
How do we balance social, economic and ecological demands on what we do when we set up a business…
Unltd – The Best UK resource;
This is their guide, its great
This has the worlds best SE’s and their individual stories as nominated by WEF in one place!
kaospilot (Copnhagen school)
Weird but kind of interesting!
The main UK resource is Social Enterprise UK
The Guardian UK Social Enterprise Network