Today is Social Enterprise day as part of Global Entrepreneurship Week. One thing’s for sure is that the social enterprise sector is growing. As people reject behaviour demonstrated by the banks, and look for more meaningful ways to make a living and to live, social enterprise has been the obvious answer. This is demonstrated in part by the increased awareness around social investment.
It would appear that investors from many private and public backgrounds are looking to invest their cash in social enterprises. I’ve recently been to two conferences (here and here) that have talked about just that. In fact, there’s talk of huge sums of money that can potentially be re-directed to social enterprise. So are we sat at the edge of a big opportunity? I think that this remains to be seen. But what I have picked up are a few key points that can indicate success for social entrepreneurs. Here’s my list.
1. Look to the long term in everything you do.
Exit strategies are not common speak in social enterprise strategies. I think there are a number of reasons for this. First off, to run a successful social enterprise, you need to have commitment and not to be afraid of being in it for the long-term. A three year plan with exit strategy just ain’t going to cut the mustard at the moment. Why? Well, running a social enterprise is tough. Let’s face it. We’re taking into account lots of complex ideas and factors that make running our businesses difficult, but potentially hugely rewarding too. So looking to the long-term is important – whether it’s for investment, projects, suppliers, or contracts.
2. Measure, measure and measure again
SROI – social return on investment is the weapon in your armoury that can bring good things – from finance and contracts to funding and PR opportunities. Set up a key list of impacts and ensure you can measure them – i.e. how many people have you helped, how much money has gone into supporting local communities etc. And keep the data current, and don’t be afraid to publicise your achievements too.
3. Keep politics at arm’s length
One of the questions at a recent conference was, what difference would a Conservative government make to the social enterprise agenda? And I say, who cares? If we’re going to prove ourselves as business owners, we need to generate income and be independent of political agendas. In other words, know when politics can help you, but don’t rely on it, for goodness sake. Some would disagree – especially those who rely on public sector contracts, but that’s quite scary in itself. We need to compete on a level playing field with other businesses and develop skills which will help us to do so.
4. Scale vs localism
Grassroots is a common term used among social entrepreneurs. It gives the impression of people running projects within a tightly-knit community in one geographical location with limited budget and scope to replicate. I think, while community projects such as these are interesting and important, the grassroots movement is more than this. It’s about working within a context and developing an understanding of a group of people or the issues of a place. Take Ecoescape for example, we’re based in Nottingham but our work covers the whole of the UK and Ireland. Despite this, we’re seen as quite a grassroots organisation having been started on a shoestring based on a need and opportunity. However, our challenge is to remain relevant to our communities and beneficiaries whilst having a broad reach. This way, we can continue to operate in a way that has impact and longevity. If an idea can be scaled, then why not?
5. Have a track record
Don’t just start a social enterprise because you think it would be a cool thing to do, or you just want ‘to do good’. You must, above all, have an interest and developed experience in one area – whether this is in a private, public or third sector organisation. Having a track record and commitment to one field will help enormously as you develop your business. Once you do set up the social enterprise, keep a portfolio of your achievements including press coverage, awards, funding, and milestones. And create a management team that has a broad range of expertise and skills. It helped us to draw a matrix of all the areas that we needed to run the business (e.g. finance, marketing, operations etc) and work out where the gaps were.
Ecoescape is a Community Interest Company. This is a relatively new legal structure allowing companies to trade but with a not-for-profit status. All Ecoescape’s profits, in fact, go back to the community and projects that we support. We believed that the CIC model best represented the way we wanted to run our business – the first of its kind in the travel industry! Obviously you don’t have to run a social enterprise as a Community Interest Company – there are other legal and equity structures which support companies that have strong social and environmental aims. We’re aiming to be self-sufficient which means that the support of our suppliers and readers is crucial. We’re lucky to have so many loyal people behind us.