What is a social enterprise?

What does it take to be a social entrepreneur?

The challenges of running a social enterprise

Support and funding for social businesses

A social enterprise is a company that’s core mission is to benefit and improve society – be that via the community or environment. However, unlike a charity, it is still a business looking to run and grow independently and make a profit.

As with any company, a social enterprise will need a solid business plan, however alongside having an aim to balance the books, equally important will be its ongoing contribution to its social goal. While the definition of a social enterprise is constantly developing and evolving, it can be more or less identified as a business that generates its own income through a trade while the majority of its profits are reinvested back into a social mission.

According to the Oxford dictionary, a social entrepreneur is a ‘person who establishes an enterprise with the aim of solving social problems or effecting social change’ – sounds perfect for anyone who grew up with superhero aspirations.

However, running a social enterprise in UK is no easy feat, as your business will have to compete with both charities and purely commercial businesses for financial support, market share, and attention. It involves many of the same steps as running a normal business such as researching your market, testing your idea, establishing a strong brand, monitoring cashflow and managing staff – all whilst trying to hit a social target.

Therefore as a social entrepreneur you must be prepared to be flexible, able to balance a multitude of tasks, and – as your business is advertising itself as having a ‘social mission’ – you must be transparent in communications, and attentive to the law and red tape set out for both social enterprises and regular companies. As Craig Dearden-Phillips, who runs a competitive and highly creative social enterprise VoiceAbility, puts it, running a social enterprise “doesn’t mean abandoning business disciplines”.

However, don’t be discouraged just yet – there are many advantages to running a social enterprise. These include different types of tax and business rate exemptions, grants and resources. Social Enterprise UK is the industry body for social enterprises, but there are many other incubators, investors, and business support organisations that focus on helping ethical companies such as early-stage tech social accelerator Bethnal Green Ventures, members group PwC Social Entrepreneurs Club and support provider UnLtd.