The social enterprise works to a business model that ties in social outcomes with the business operations in perfect harmony. I know what you are thinking. They come together. That’s what social enterprise is all about. The two are inextricably linked; otherwise, it would be a charity that trades or a business that does corporate social responsibility. The methodology has been well accepted for over 20 years, social enterprises existing long before under different names.
I would like to argue that there is another way. The journey to the social enterprise can be a process, and we should encourage and celebrate that. When does a charity with a trading arm become a social enterprise? And how much social value does a business have to add before it can be called a social enterprise?
We have some answers for some of these questions. Some people say that a business is a social enterprise when at least 50% of the profits go towards social improvement.
Having coached and supported more than 250 social enterprises for more than half a decade, and through running my own business, I can tell you that in the early months and years, every pound of cash flow is vital. Without adequate cash flow for maintenance of operations and growth, any business, or charity will cease to exist.
I’ve seen many startup social enterprises struggle with this when getting started. It can be extremely hard to give away that much in the early days when you need it for the sustenance of your own life and enterprise. The UK has a great social investment sector, but what about those entrepreneurs that don’t want outside investors?
I think there is another path that isn’t talked about enough. That is the path of gradually incorporating social values and benefits in your entire business as you grow.
It is within this category that some of the largest contributors of social value sit. Small social enterprises are great. But if we want growth in the sector, we need large social enterprises.
I don’t mind if you started off as an enterprise, and added the social later, and I don’t think anyone else should either. I believe that if enough socially minded people build businesses, they will eventually put the “social” in their enterprises when they can.
I don’t think we should expect people to build perfect social enterprises from day one. It’s just too hard most of the time. I’ve seen it. People sacrifice salary for social benefit. That’s not sustainable. Build a business that works, and add social values as you grow. Trying to get everything perfect from day one will kill you.
It’s just too hard for most new bootstrapped businesses to have a completely social supply chain, carbon neutral offices, organic, fair trade and locally sourced everything.
So go out there. Be a business for a bit. Get some money coming in. Know your purpose and your goals, and don’t worry if you are not perfect yet. You can be perfect later. For now, just get started, and keep going. We need your ideas in the world.