sharing lessons on social enterprise from the united kingdom mark brown

Sharing lessons on social enterprise from the United Kingdom

Mark Brown

Social Spider CIC

Set up in 2003 with no start up capital at all

Survived early days by support in kind (office space in return for providing services)

Traded with contacts from former professional life

Worked primarily on web and young people's projects

Social Spider CIC

Changed direction in 2006 with the development of One in Four magazine

&Ongoing contract to deliver participatory young

people's magazine for London borough of Hackney

What do social enterprises do?

To put it very simply, social enterprises make social good happen by selling people goods or

services they want to buy at prices they are willing to pay and making enough money doing

that to keep going

“a social enterprise is a business with primarily social objectives whose

surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for

shareholders and owners”

Department of Trade & Industry, 2002

Bad reasons to start a social enterprise

You’ve heard that social enterprise is the next big thing

Your charity has had its funding cut and you

need to generate some more income

Your charity can’t get a grant to pay for its services so thinks it will try to sell them instead

More bad reasons to set up a social enterprise

Your department is being abolished and your line manager has told you to set up a

social enterprise 

The ‘development funding’ your organisation has received includes a target

to ‘set up at least one social enterprise’ 

You’re not earning very much money working in the public sector/voluntary

sector and would like to earn more

Good reasons to start a social enterprise

You’ve spotted a social problem and you’ve got an idea for a business that could tackle that

problem

You need a job and you think that you can do something socially that will generate a

sustainable income

You’ve been delivering a service within the public sector and you think you’d be able to provide a

better and/or more sustainable service by starting an independent business

You need to know who is going to buy what you're selling

There are three main ways that social enterprises generate value

1. The activity they undertake to make money has a social value in itself

2. They undertake a particular activity in a way that generates social value

3. Their trading activity generates profit which they invest in social value

It is very easy to get confused about which of those three ways of generating value you are

looking to use.

Example: You open a social enterprise cafe

You could:1. Use it as a way of training young people

2. Run it as a straight cafe but only sell organic food

3. Run it as profitably as possible then invest profits in community

The chances are that you'll find it difficult to do all three of those things at once and be

sustainable.

Not all social enterprises sell to the same types of customer

There are three main markets to which social enterprises sell goods and services

1. Straight to the consumer (B2C)2. To other businesses or charities (B2B)

3. The public sector

(Strictly speaking, they are also selling outcomes to grant funders)

The biggest challenge

The biggest challenge in social enterprise is meeting your social goals by selling the right

things in the right way to the right people at the right price

Social enterprise must have equal focus on 'social' and 'enterprise'

Social enterprises spot gaps and fill them in entrepreneurial ways

What about Social Spider CIC?

Social Spider CIC draws its revenue from a mixture of trading activity and grants

It sells goods and services to a range of different markets

Social Spider CIC has an asset lock which means although directors can be paid, the assets

profits of the company must be reinvested in the community

It is in the process of measuring the outcomes of some of its activities

One in Four, our flagship project has gone through three distinct phases in the quest for

sustainability. We always knew we wanted it to be available for free to as many people as

possible but this posed the question:

Where will the money come from to make it happen?

Three distinct models for One in Four

1. We'll get a grant to pay for all of it

2. We'll get a grant to pay for some of it and then we'll charge large organisations for copies

3. We'll charge large organisations, we'll offer individual subscriptions and we'll do other mental health related work to subsidise it

What have I learned?

Working out what social change you want to see is often easier than working out how you're

going to make it happen

Being able to tell the story of your business and the social value you generate is important but it

often doesn't matter to consumers

Business runs at a different timescale to charities and the public sector

Working out what people will pay for is vital to the entrepreneurial process

Am I glad I work in social enterprise?

Social enterprise gives huge freedom to make things happen without waiting

One in Four magazine would never have happened if we hadn't just gone for it and tried

to make it happen

How many social enterprises are there in the UK?

Department of Business, Innovation and Skills’ Small Business Survey (published in 2011)

estimates 68,000 social enterprises in the UK

Respublica / Unltd estimate 238,000 people running or attempting to start social enterprises

Social Enterprise Mark ‘the only certification authority for social enterprises’ awarded to 462

organisations

Mark Brown

mark@socialspider.com

@markoneinfour

www.oneinfourmag.org

www.socialspider.com