If you're new to the world of social enterprise, here's a quick introductory guide to what it's all about. Social enterprises have recently become particularly popular with politicians in the UK, yet many people have never heard of them, or don't know much about them. No apologies for contentious or irreverent views.
What exactly is a social enterprise? "A business or service with primarily social objectives whose surpluses are principally reinvested for that purpose in the community, rather than being driven by the need to maximise profit for shareholders and owners" is the best that Futurebuilders have come up with, and despite being a bit wordy, it does get close. Many people try to come up with their own definitions, but life is too short to worry about it too much.
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How do I recognise one? Not-for-profit, and Community Interest Company are two easily identified labels which some enterprises attach to themselves. Charities which trade are, on the whole, also count. Beware, though, that some savvy private sector businesses have woken up to the beneficial cache of having a social purpose.
What is the Third Sector? The Third Sector itself isn't new, but this a nice trendy new name for everything which isn't private or public sector.
What are the benefits of being a social enterprise? In truth, sadly there are few financial benefits of being labelled as one rather than a private business. Corporation Tax is still levied, and there are no other tax benefits available as yet. The real benefit is in the branding and associated image of being a business which is trying to "do good".
How do I set one up is? It's a bit more difficult to set up a social enterprise than a private business, but not much. The real challenge is in coming up with a workable business plan which is not reliant on grants or hand-outs.
Where can I go for help? Find someone who knows what they're talking about. There are any number of 'professional advisors' with little hands-on experience of how a social enterprise actually works. If you can find an accountant or legal expert who can recognise a social enterprise, you're doing well. Find someone within the sector is the best bet and pick their brains.
Is there a down-side? The Third Sector is full of fairly new, relatively small enterprises. Many social enterprises have only a handful of staff, reliant to a large extent on the energy and vision of the founders, rather than on a robust and sustainable business model. As a fragmented and diverse sector, the future is uncertain, but it is definite that many of these enterprises will not achieve longevity. In fact, it's very similar to the private sector.
A Brief Introduction to Social Enterprise
Ken Tilney writes on social enterprise and business issues facing charities and the Third Sector for http://www.seb2b.co.uk, a social enterprise B2B directory.
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