Running A Successful Social Enterprise
Many of the skills needed to run a social enterprise are similar to those needed to run a private sector business - some suggest 80% of the skills are common. The other 20% is what makes running a successful social enterprise more difficult, but also more exciting!
The number of social enterprises is growing dramatically. A recent national survey found a very large proportion of start-ups, three times as high as the proportion of start-ups currently seen in the UK's small business sector. But to compete successfully with for-profit companies, social enterprises may face additional business challenges:
- they often employ people traditionally excluded from the mainstream labour market because they are regarded as being unreliable
- they tend to locate in areas of high deprivation - to be closer to the local community and for affordable rents
- they provide services for people who would not otherwise be able to afford them
Route to Social Enterprise
There is no one route to setting up a social enterprise. Ways in which social enterprises may develop include:
Charging for services which were previously offered free or low-cost such as training, photocopying, or office space.
Floating a project as an independent enterprise which was previously developed under the umbrella of another organisation such as community transport and furniture recycling. Increasingly this may also be a public service previously run by a local authority
Meeting a community need - individuals or a community group sets up a business to replace lost services such as a shop, a café, a credit union for affordable loans, or a nursery.
Characteristics of an entrepreneurial organisation
Self-awareness - about staff expertise and skills gaps.
Environmental awareness - about trends and opportunities affecting the business.
Passionate but purposeful - staff are committed but share clarity about the cause.
Planning for change - plans allow 'flexibility in a framework' and are put into effect!
Fearless with figures - cost, price, value and viability are understood.
Market knowledge - and the ability to compete on quality and customer focus (not necessarily on price).
Delegated decisions- staff are trusted to make decisions.
Ability to take measured risks - seeing failure is a comma, not a full stop.
Above all, it takes the right mix of dedication, determination and skill to run a successful social enterprise. Whatever business model you choose, it's likely you'll be trading with an increasing number of social enterprises in future.