7 Tips to Starting a Social Enterprise

First things first - what is a social enterprise? There are many definitions but we think this one from Social Enterprise U.K. sums it up best:  Social enterprises are businesses that trade to tackle social problems, improve communities, people's life chances, or the environment. They make their money from selling goods and services in the open market and they reinvest their profits back into the business or the local community.

Social Enterprise Canada reminds us that on this side of the Atlantic, we are more likely to define social enterprise as a business operated by a non-profit entity. In the Canadian legal context, “mission-related” businesses are allowed for non-profits and charities. (https://goo.gl/JoEq4i).

Whether you decide to go the non-profit route, or simply make your business wholly or partially a social enterprise, you are just adding a social element to it. Here are seven tips to get you started.

  1. Ensure you have all the resources at hand to effectively launch your business idea, regardless of its social commitment. That list should include solid financing, sufficient business training and the necessary experiential and intellectual human resources. (This may be just you or you and your partner/spouse – and that’s OK so long as you and s/he bring the necessary skills.) Always bear in mind that in the first year at least, your new company is like a newborn baby that demands vast amounts of your time and energy.

  2. Think long and hard about the social commitment you want to make. Should it be local, national or international? Will it be a financial commitment as in contributing some or all profits? Will it be an in-kind commitment as in providing goods, services and/or time? Or is it in some other form? The final question to ask yourself is: is it really viable?

  3. Bear in mind that working at a local, community level has the advantage of easier connection with your chosen cause and the ability to see the benefit of your contribution first-hand. However, meeting an international need may be a better fit for your product, service and philosophy, or the money, time or services that you are prepared to devote to it.
  4. Consider how best you can use your skills, and those of your team, to support your cause. There has to be a match between the needs of your cause and what your company is producing, unless you are simply donating your profits to the cause. If, on the other hand, you are starting from scratch and intend to tie a new product directly into the cause, be realistic about whether it is saleable in sufficient quantities and has the ability to make a profit.
  5. Let your customer know what effect their purchases have on the cause you are championing. Toms Shoes has given 43 million pairs of their classic slip on shoe to children in need in over 70 countries through their one-for-one program. Their website provides the complete story http://www.toms.ca and allows their customers to follow their good work closely.
  6. Put together a one-page brief along with your business plan which you can use to get the understanding, cooperation and buy-in of your support team including your family, your accountant, your financiers and maybe even your landlord.
  7. Thoroughly research the organization or cause you think deserves your support. Ensure it’s in harmony with your values and determine whether it’s a good match for what you have to offer. Part of this research should be a search for any skeletons in the organization’s closet. Be sure there’s no scandal attached to the organization, so that your contribution isn’t wasted or diverted to maintain large salaries for management and administration.

Tips adapted from Social Enterprise: An Introduction by Ken Stratford (a Better Business Content publication).

About Trenval

Trenval Business Development Corporation is Bay of Quinte’s Community Futures Business Specialist, financing business start-ups, expansions or successions in the Quinte region for 35 years. Trenval can help with small business support including small business funding and small business loans.


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