What is a Social Enterprise?
Throughout this website it will be not-for-profit social enterprises that are primarily discussed and supported.
A social enterprise is a way of doing business that benefits more than the owner/shareholders of the business, they are often described as mission-led or purpose-led. To count as a social enterprise there must be something within its governing documents which sets out the way in which it operates that has a social, economic, community or environmental purpose at the heart of the organisation. What is your vision?
Social enterprises can have a number of different legal structures including Voluntary groups, Community Interest Companies (CICs), Charitable Interest Organisations (CIO), charities etc.
Ideally social enterprises should either be sustainable from the start or have a plan setting out how it will become sustainable in the future. Organisations should not rely on funding to deliver a project and then turn to the next funding stream to deliver its next project. Think of funding as a way to trial a new activity or project which can be turned into a funding stream of its own to ensure sustainability. Funding can be sought to carry out specific activities etc but there should be a sustainable line of income, where possible, to reduce the possibility of disruption to services and pressure on staff members should there be a funding gap.
Any profits made by the organisation should be reinvested back into the organisations social purpose. It should also be remembered that owners of these organisations can claim a salary from the organisation.
Key points to remember:
Social enterprises can have a number of different legal structures, there is no one size fits all
What is your vision and how will you achieve it
Successful social enterprises should be run in a business-like manner
Ideally it should be sustainable from set up – think about your funding streams
So how do you decide the purpose of your social enterprise?
It is likely that if you decide to set up a social enterprise you will already have a strong idea of the reasons why, when deciding it is important to consider the following:
Skills – What skills do you have? What are you good at?
Gaps – What is missing from your community? What does it need?
Passion – What do you care about? What do you want to do?
Vocation – What can you be paid to do?
Once you have decided what your organisation will do, take the time to create a Vision and Mission Statement, they only need to be a short paragraph which sets out what the organisation aspires to create (Vision) and what will be accomplished in search of this vision (Mission). The Mission Statement should set out the purpose and objectives of the organisation.
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