What Comes First – The Social, or The Enterprise?

I know what you are thinking. They come together. That’s what social enterprise is all about. A business model that ties in social outcomes with the business operations in perfect harmony. The two are inextricably linked; otherwise it would be a charity that trades, or a business that does corporate social responsibility.

I would like to argue that there is another way. The journey to 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 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 the 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.

Wharton Business School, irresponsible travel, and how you can have fun and do good at the same time.

Recently I was interviewed for the Wharton Business Radio Show, Dollars and Change.

It’s great to see a leading, Ivy League University putting resources into developing social impact initiatives like this.

As it’s a paid-for service, I can’t link to the actual 30 minute interview, but I’ve put details at the bottom of this article as to how you can sign up for a free trial if you’d like to listen.

What I can do is share four interesting points that came up from the interview.

Question: We’ve heard about your Beer-to-Beer Social Enterprise Learning Journey. This sounds amazing. We want to join. Can you tell us a bit more about it?

Answer: As I’ve said before, your friends are amazing, but you don’t always have the chance to learn from them.  Sure, you can go out with them for a beer on a Friday night, but why not go out on a fun journey with them, and actually learn something new at the same time?

That’s what the Impact Hub Crawl is all about. Not just peer-to-peer learning, but Beer-to-Beer learning!  Here’s a video to explain more from my last Impact Hub Crawl, Beer-to-Beer social enterprise learning experience:

Question: Surely, some people just want “irresponsible” experiences. Are people really interested in responsible travel experiences? 

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