Going social: what defines a social enterprise?

So, you’ve got a big idea, and you’re fairly confident it has a social purpose. Fantastic!

There’s just one niggling doubt; you’re not entirely sure if it is social. In your mind, you’ve defined the purpose of your venture and it appears to have a very strong social or environmental theme, but will it be seen that way by others? Does it instead swing more towards a traditional business or charity?

If you’re new to the world of social enterprises, answering these questions is challenging, but that’s for good reason; businesses that have a true social purpose are well defined yet not always easily distinguished (on the surface at least) from ‘regular’ enterprises.

At Inspire2Enterprise, we define a social enterprise as ‘a business that trades primarily for a social and/or environmental purpose, or for the good of the community’. However, we appreciate you may need a bit more to go on that, which is why we’d like to summarise the constituent elements of a modern social enterprise in this blog post.

We won’t get into the nitty-gritty technical detail, but we will consider the essence of a social enterprise, which should give you plenty to go on.

Social enterprises meet a need

Working to understand the needs of the target customer base is a key task every business must go through during the initial planning stages, but when it comes to social enterprises, the approach can often be rather different.

For instance, you may already know that your service or product offering complements the services currently offered by local authorities or government bodies, and if that’s the case, ‘relationship marketing’ is usually the best route forward.

Social enterprises exist because they meet a tightly-defined need. To find that need, those behind the enterprise typically opt for marketing tactics that involve building relationships with their target audience, thus enabling them to better understand their needs.

Find that need, and you’re on course to creating a social enterprise.

Social enterprises want to change the world

The ‘need’ discovered by a regular business may be to provide a service which helps B2B customers increase leads or consumers answer a particular problem. These are all valuable service provisions, but a social enterprise will have a far more lofty purpose.

Social enterprises want to change the world. And while that may border on arrogant to the casual observer, if the need discovered is for the betterment of people’s lives or positive environmental change, it becomes a very palatable desire.

Every business needs a goal, and if yours is to change the world, there’s a good chance you’re heading into the realm of the social enterprise.

Social enterprises aren’t in it for the money

A social enterprise is just like any other business in that it needs to maintain good cashflow and make a profit if it’s to survive. Likewise, a business plan is crucial, and funding is often needed.

Social enterprises compete within their chosen niche or sector just like any other business, too. However, where they differ from traditional enterprises lies in their focus on change, as opposed to cold, hard sales figures. For a social enterprise to be sustainable, it needs to establish a human or environmental need, have the desire to change the world and put everything into delivering on its promise.

In doing so, the business will be both profitable and capable of meeting its social goals, but the latter is always the focus. Consider the income a nice side effect!

Social enterprises break with the conventional

The definition of a social enterprise wouldn’t be complete without touching upon the fact that such organisations thrive on breaking the mould. If a tried-and-tested technique for doing business gets in the way of their ultimate social or environmental goal, they’ll navigate around it and find new ways to realise their vision.

For example, consider the social enterprise operating in the restaurant sector, who’s raison d’être is to commit its entire staff budget to rehabilitating ex-convicts by offering them employment within the hospitality industry. Few conventional businesses would go out of their way to make that a goal, but this is a classic example of what sets social enterprises apart.

Strip a social enterprise bare, and it is fundamentally about doing what’s best for society and the environment.

Wrapping up

It’s worth reiterating that defining a social enterprise isn’t particularly easy. For this reason, if you have the desire to set up a social enterprise, or have an idea that appears to sit somewhere between a charitable endeavour and that of a commercial organisation, it pays to seek professional advice.

Our team are on hand to offer free, impartial guidance on such ventures, so why not get in touch today to discuss your big idea?

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