According to the State of Social Enterprise Report 2015 almost 49% of all social enterprises are five years old or less. 35% are three years old or less. In other words, social enterprise start-ups are growing at a rapid rate.
But why? What is so special about social enterprise? Well, if you want to save the world, you start a charity. But if you want to make a difference and a profit then you choose to be a social entrepreneur. The difference between a charity and a social enterprise is that social enterprises generate income by selling goods and services. They are also active in markets that are not specific to social enterprises. They do this, make money and make a change to people’s lives all at the same time. And being a social enterprise is an excellent unique selling point – if you had a choice, wouldn’t you always choose to help others while you help yourself? For example: two companies sell great shoes at the same price but one of the companies gives some of it’s profits to poor people in an underdeveloped country – aren’t you going to choose the company which helps?
So a social enterprise is a good way to attract customers. But what about the kind of people who start social enterprises? Who are they? We all know that people who start social enterprises want to ‘save the world’ and ‘make a difference’. Or do we? There are 68,000 social enterprises in the UK alone and the question is, WHY?
The answer is simple. For anyone who wants to be a successful business person they need to choose a good business area to make money in. And this is one of the biggest reasons for starting up a social enterprise – it’s a great way to make a lot of money. So social entrepreneurs are clever, creative people who see a way to help and make money at the same time.
More and more business people are realising this and this is why we are seeing a non-stop flow of social enterprise start-ups like Jamie Oliver’s Fifteen restaurant chain, Tom’s Shoes and 3SpiritUK.
And it’s interesting that we see more social enterprise start-ups in difficult economic times. According to Social Enterprise UK’s Chief Executive, Peter Holbrook, a former social entrepreneur:
“Social entrepreneurs see a problem and want to fix it. And at the moment, with youth unemployment, fuel poverty, reduced services in social care and other problems coming to the fore because of the economic crisis, we’re seeing an upsurge in people wanting to remedy these issues in their communities. Social entrepreneurs are people who are not willing to watch their communities and the people living in them suffer. They use business acumen to tackle the issues head-on.
Setting up and running a social enterprise is not for the faint hearted, not only do you have to satisfy your customers, you’ve got to make the business sustainable and achieve your social or environmental mission, but the rewards are incredible.”
Making any business successful takes hard work but there is an art to making a social enterprise work. When that art is mastered, incredible profits are possible. And all of this whilst improving the lives of others.
For more information on how to make a social enterprise start up work, join one of Nyasha Gwatidzo’s social entrepreneur mentoring programmes.