What is a social enterprise?
A social enterprise fulfils a social purpose and trades for the benefit of society, the community or environment.
Whilst a social enterprise is a not for profit distribution organisation this does not mean they should not be profitable. In fact, a social enterprise must aim to make a profit in order to continue their activities and become sustainable. However, it is what it does with the profits that matters.
Whilst you will be able to withdraw a salary, revenue needs to be reinvested or redistributed for the social benefit of the community/beneficiaries or environment.
How do I start up a social enterprise?
There are three key elements to starting up a social enterprise: research, planning and finance.
These are outlined here and should be incorporated within any business plan. Carrying out these activities will not guarantee your success but will certainly increase your chances and give you a good foundation on which to build and grow.
Starting any new venture and developing your enterprise idea is exciting, but for some it can also seem daunting and overwhelming. Inspire2Enterprise can support and guide you through the start-up process.
To speak to us about starting an enterprise, contact us.
How do I grow my social enterprise?
Deciding to grow your social enterprise is important and can be very beneficial in terms of increasing revenue and/or reaching a wider audience. Typically it will also require additional resources and the need to assess your current enterprise services, processes, resources and finance, all of which will provide a strong starting point.
You will need to plan how you will manage this growth. Will you need more staff/volunteers? Will existing premises still be suitable? How will you finance this growth?
Additionally, if you are looking to grow through the introduction of new products and services, you will need to determine, by research, if there is a market.
Without planning you can potentially risk what you have already achieved and the future of your enterprise.
If you are thinking of growing your enterprise our advisers will be happy to discuss this with you, contact us.
How do I apply for funding or grants?
Whether you are a new or established social enterprise you are very likely to need funding in order to meet your objectives. Funding can take many forms including grants, loans, social investment bonds and equity investment.
Before pursuing funding opportunities it is important to determine the amount you require and what the funding will be used for. Depending on the type of funding you pursue it will be necessary to either submit a bid application, a business plan, present to potential investors or a combination of these.
Not all of these will be appropriate for you and our advisers can discuss the options available and help you get to a stage where you are ready to seek funding.
How do I measure Social Impact?
For advice on how to measure social impact, click here.
How do I tender for new contracts?
There may be a number of public and private sector tender opportunities available that your enterprise could fulfil and deliver. The value of the contract will often dictate where the tender opportunity is advertised – some small value contracts are only advertised on the tender organisation’s website.
Contracts are intended to deliver a service within an agreed budget and provide value for money. This does not mean the lowest value bid but includes additional benefits that may for example have a positive effect on the community – in other words, the social outcomes and impact.
You should also give consideration to bidding for contracts jointly with other organisations where, in collaboration, you can provide a better, and perhaps more cost-effective delivery solution.
The tendering process can be time-consuming and you will need to consider if the time spent will be worthwhile and whether the contract is actually worth pursuing.
You also need to consider the ‘opportunity lost cost’ – “If I spend x hours/days on pursuing this contract, what other opportunities could I be missing?”
And of course you will need to carefully consider how you actually fulfil the terms of the contract and remain profitable in the process, should you be successful in winning the tender.
Also remember that, if you are successful in winning a contract, it will at some point come to an end with no guarantees that it will be renewed. Therefore you should continue to look for other contracts or ways to generate new income.
There are a number of ways you can search for contracts and our advisers are available to discuss the tendering process with you.
Why is trading important?
Developing trading activities through selling products or services will help you to generate your own income and become sustainable .
Bidding for grants is time-consuming with no guarantee that you will be successful and in any event, the amount of grant funding available is extremely sparse and that which is available is chased by countless other enterprises too. A reliance on grant funding is risky and is not sustainable – what will happen to your social enterprise when the grant funding has been used? The key is to trade, and not be reliant on grants.
You will need to ensure that any trading activity from the supply of your product/service generates sufficient income and importantly a profit. As a social enterprise you can trade in any way appropriate to market need (as long as it is legal), the profits from which can then help you achieve enterprise sustainability and your social objectives.
If you are considering trading or ways to generate more income please contact our advisers for guidance and support contact us.