There is a lot of talk these days about social enterprises (#socents), a relatively new way of doing business, which we believe is a ‘movement’ in the entrepreneurial world. It seems that millennials (in general) are the driving force behind the trend that resonates with all generations and revolutionizes the way people do business. Because ‘socents’ are fairly recent, there is little research on their successes, failures, and what motivates them.
As with all new things, people are following social enterprises to see if it really is a successful and revolutionary new way of doing business or if it’s just the trend of the moment.
Social enterprises: what are they?
Social entrepreneurship, according to Harvard Business Review“has emerged in recent decades as a way to identify and bring about potentially transformative social change.”
Social Business Council of Canada describes social enterprises as – “enterprises owned by nonprofit organizations that are directly involved in the production and/or sale of goods and services for the combined purpose of generating income and achieving social, cultural, and/or environmental objectives.”
The main identifying characteristic of social enterprises is that they are businesses that have a greater purpose and are generally aimed at ‘doing good’. weather make a profit.
Social enterprises: key challenges
The first and most important challenge of a social enterprise it’s just not an easy way to increase revenue. Most pennies take years to break even, let alone start generating funds. Long-term commitment and subsidies are essential and hard to find. Therefore, a common way to seek funds is through crowdfunding campaigns such as IndieGogo or PinUp.
But even then, nothing is certain, and balancing the social and financial priorities of a social enterprise is extremely challenging.
The second challenge we have observed is the difficulty of selling a new idea. In most cases, the idea has not yet proven to be successful and is therefore not risk-free, although it may have great potential. It is difficult to “launch” an idea that has not yet shown results; and it is almost impossible to implement the idea without the money to do it. It’s a bit of a “chicken before the egg” dilemma and can be one of the most frustrating aspects of starting a social enterprise.
As Demand Media’s Sarita Douglas explained, “A social enterprise faces the same issues that any traditional business faces in its growth and operations. But social entrepreneurs also face unique challenges in delivering the social value, social returns, or social impact of the business.” company in addition to commercial value”.
Benefits: success is possible
To be successful, the social enterpriseyes it must meet both social goals and significant financial constraints. The initiative must be financially sustainable, otherwise the project will require a constant stream of grants, charity and donations on which traditional non-profit organizations heavily depend; which are, by nature, unsustainable and difficult to insure.
Many social enterprises maximize their impact through collaboration, cooperation, and social innovation. They approach traditional business problems in a different way; and the scale of the business does not necessarily equate to the scale of the impact.
A common practice among social entrepreneurs is to share ideas with their peers. For us it has been fundamental to build relationships and networks to maximize the impact. Rather than worry about competitors, we have embraced the strategy of sharing information and connecting with our peers in an effort to gain insight, industry “best practices” and future contacts.
We recommend brainstorming with experts and collaborators to help find solutions to common industry problems. Simply put, the more people who are inspired and join your “movement”, the more likely others will take notice and, in turn, make resources available.
There is still a lot of work to be done to discover all the benefits of running socially responsible and economically sustainable organizations. The bottom line is this: a social enterprise is a business. It should be run by professionals with business experience who understand financial planning, scalability, and growth. plus Social problems