The term ‘social enterprise’ is very well-known in the world of social entrepreneurship. Social entrepreneurship can be very gratifying, but also difficult so one must be aware and make premeditated risks. Essentially, it is a way of displaying news and significant development in business and changing the world through an entrepreneur lense.
“Ideally, a social enterprise wouldn’t just turn a profit; it’d be a business that practices corporate social responsibility, helping the outside world without having to rely on donations or adhere to the same guidelines as traditional nonprofits.”
Overall, a social enterprise’s purpose is to attain a greater good for the world such as creating more jobs for those who are unemployed. It is important to understand that although social enterprises do make profits it is not the only thing that motivates them. Entrepreneurs enjoy doing greater good for the world and its people by providing support and resources through a social mission.
Popular social enterprises are ones that improve the world. For example, “Compreneruship unites students and disadvantaged people to develop and execute entrepreneurial projects. In a recent project, students studying design, journalism, and business joined up with local homeless people to create and distribute an original newspaper.”
Social enterprises differ from charities that depend on outside funding such as grants to attain success. With a social enterprise, its main goal is the reestablishment of revenue versus payments to co-owners. If you are someone who loves helping people, the environment, and also creating solutions for ethical issues then social entrepreneurship is your calling.
As well, if you are social media savvy then this will work to your advantage as getting in contact with customers on social media as well as marketing is important. Instagram is a great tool for marketing and also communicating and getting your message across. At the end of the day, it is called ‘social’ for a reason. Looking at the U.S. specifically, did you know:
- About 40 percent of social enterprises occurring in the United States have less than five employed. Evidently, only 8 percent have more than 100 workers.
- 45 percent of social enterprises in the United States have accumulated only $250,000 in income and only 22 percent have accumulated over $2,000,000.
- Only 35 percent of social enterprises in the United States are non-profit organizations. In fact, 31 percent are structured “C” corporations as well as LLCs.
- 20 percent have given rise to changes in regions of the United States in regard to economic progression. In addition, 16 percent are committed to employee development. As well, 12 percent are focusing on energy and the surroundings of the world such as with climate. In addition, 11 percent are focused on education, and lastly, 7 percent are working internationally.
- Last but surely not least, 60 percent of social enterprises in the United States was constructed in 2006 or later, with 29 percent constructed starting in 2011.”
Types of Social Enterprise
There are 6 types of social enterprises that social entrepreneurship covers:
- Entrepreneurial Nonprofit
- Non-non profit
- Socially Responsible Business
- Give One, Get One / Donate Portion of Proceeds model
- Awareness Brand
- Everything Else (not a one size fits all)
What are the main objectives of a social enterprise?
When it comes to a social enterprise it encompasses a lot of development and the entrepreneurial context in regards to helping satisfy the needs of individuals and the economy. More specifically it supports ethical issues. Evidently, it involves social entrepreneurship, social media, and social enterprise alliance. But what are the main objectives of a social enterprise?
“The objective of a social enterprise could be to encourage the employment of women in tech-related fields. The business sells services and products relative to their mission and then reinvests the money into the program itself or into efforts supporting women in tech such as free resources.” Another objective discussed is that social enterprises are designed to assist communities and take on environmental concerns in the economy.
Social enterprises take place all over the world and Spain is a country that has been ranked high with business enterprises. Nation Master states that “Since 2014, Spain Business Enterprise R&D Expenditure in Residential Care Activities and Social Work Activities Without Accommodation decreased by 12% year on year. With €3.41 Million in 2019, the country was ranked number 1 comparing other countries in Business Enterprise R&D Expenditure in Residential Care Activities and Social Work Activities Without Accommodation.”
Examples of Social Enterprises
There are several distinct and unique types of social enterprises in entrepreneurship:
- Credit Union: An example is Co-op Financial Services, which is an interbank network that is located in the U.S.
- Community- based organization: An example is “The Recycled Orchestra,” which is a business that was developed in Latin America and was designed to help provide opportunities for the community and to improve the area.
- Non-Governmental Organizations with commercial arms: An example is BRAC, which is located in Bangladesh. The organization works alongside people who are poor to help them get resources.
- Social firm: An example is Fifteen, which is the name of a restaurant that was established by Jamie Oliver (A British chef). These types of restaurants hire youth who have been disadvantaged due to things like drug issues or coming from a poor home. Overall, they train youth to become chefs.
- Cooperative: An example is The Seikatsu Consumers’ Club Co-op (SC) is a Japanese organization and it deals with food safety and is run mostly by women. They produce their own milk with organic products
- Fairtrade: An example is a Divine Chocolate which was founded in the UK. They produce and deliver tasty chocolate and they assist cocoa farmers.
- Microfinance: An example is Mibanco which is a Peruvian bank that offers finance to SMEs.
What are the disadvantages of social enterprise?
Although social enterprises come equipped with many beneficial advantages and provide ways to assist people and the economy there are some disadvantages. Some social enterprise examples that outline red flags are that “You have to compete with commercials, there are strict rules and regulations, and lastly, you have to constantly monitor the market.”
In addition, it is important to also note that “Running any business efficiently requires compliance and auditing, no matter what sector you’re in. Social enterprises may have extra reporting requirements.” Lastly, some other disadvantages that come with starting up a social enterprise are the “Lack of support and funding, the need to work hard to get success, social factors will affect your achievement, hard to get trust from others, and the need to maintain accountability.”