According to the latest (and most comprehensive) survey from Social Enterprise UK, there are now close to 70,000 social businesses in the UK, contributing a significant £24 billion to the national economy and employing close to one million people. The findings show that not only are social enterprises outperforming small and medium sized businesses (SMEs) on all growth fronts: turnover, workforce, job creation and innovation, the market is rapidly growing, 50 per cent of those surveyed are under five years old.
What’s leading to this new type of entrepreneurialism?
There are a number of factors influencing the growth of the social entrepreneur and a purpose driven economy. The context of the world has shifted exponentially. The unsustainable way that we have managed our resources, the impacts and implications of climate change and the deepening of socio-economic disparities are all aspects influencing the lifestyles that we lead and the choices that we make. This coupled with a changing workforce which is increasingly dissatisfied with old forms of business, means that entrepreneurialism has never been more attractive and social entrepreneurialism never more relevant.
Escape the City, an organisation helping those seeking an alternative to city life, found that 64 per cent of people surveyed are looking to have a career which has a positive social impact. In what it terms the Twenty-first Century Career, it found that people are now looking for careers that are high in purpose, health and social impact. In it’s recent report it goes so far as to claim, “passion, impact and freedom are winning out over money and power.” Escape the City has found ways to help its “escapees” tap in to practical ways of having a more rewarding and fulfilling career by firstly helping people to answer some of the big questions – ‘what change do I want to create?’ and the practical, ‘how can I do it?’
Ben Keene, Escape’s Start-up Tribe Leader, explains: “People are looking for ways that they can have an impact. We’re seeing a shift from a broad ‘save the world’ mentality to a more, ‘what can I do to make a tangible difference?’ one. Setting up a social enterprise is one way to make that happen.”
Challenges to the market
There are some common challenges that social entrepreneurs face when they’re starting out:
Access to finance: Funding streams can include grants, venture philanthropy, debt finance, and equity finance amongst others. Tax breaks are also available from local authorities.
Customer satisfaction vs social impact and purpose: often enterprises start out with a social purpose as its core objective to the detriment of the business. Balancing the books with the overall purpose is critical to the sustainable success of the business.
Stakeholder understanding: for a social enterprise, the stakeholder group is more varied as it can include customers, beneficiaries, suppliers and funders. Understanding and responding to the different groups can be time consuming but crucial for the business.
The support available to business start-ups is vast and this is evident in the social enterprise space too. Navigating the resources and organisations that provide financial and non-financial support to those with initial fledgling ideas seeking growth funding is a tricky business in itself. The opportunities are there, but how and where does one start?
According to Ben, tapping into a community of like minded people is critical to not only being inspired but also to build steps to that practical transition to more meaningful work.
Meet interesting and inspiring people: Through networking events, book clubs, whatever it takes to generate ideas and get conversations going, provide momentum and maintain inspiration.
Trust yourself and others to get ideas off the ground: Test your ideas through your networks – it’s a quick way to see if the idea’s got legs and allows for swifter adaptation of the product/ service that you’re offering.
Develop a clear business plan asking yourself key questions such as: What am I offering? What problem am I trying to solve? Who will pay for it? Who are my competition and how can I differentiate myself? What am I able to provide a funder and how do I enable them to meet their own objectives? What resources do I have and where do I need help?
Keep on top of the money: It’s the guarantee to your success and sustainability.
Governance: Establish a board that will allow you to be the best you can possibly be. That means people who come with: the right experience; the right networks; and provide the right support.