11/11/2013. At the end of this workshop participants will be able to: . c.oham 2013 Social Enterprise and Social Innovation

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1 Charles Oham School of Health and Social Care University of Greenwich This training is designed to provide information about the opportunities and benefits that social enterprise activity can offer individuals and communities. It will also give participants an understanding of the various inputs required for setting up a social enterprise. It is hoped that the workshop will propel participants to develop social enterprise initiatives that will tackle poverty and add value to their local communities. At the end of this workshop participants will be able to: 1. Explain the concept of social enterprise and social innovation; 2. Turn current assets into sustainable funding sources for establishing social enterprises; 3. Immediately start a social enterprise that will tackle poverty and social exclusion in a sustainable way. What is a social enterprise and social innovation? The benefits of social entrepreneurship Why social entrepreneurship? How to start a social enterprise Funding Case studies. 1

2 You have been asked to support a local Anglican church that feeds the homeless. The project needs to raise two thousand pounds in one month or face closure. Currently, the church has two hundred and fifty pounds and wants you to use it to raise the required amount, what will you use the funds for? Please discuss in pairs (2 minutes) The Office of the Third Sector (2005) defines a social enterprise as: 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. A Social entrepreneur may be defined as an individual who is committed to providing an innovative lasting solution to an unmet social need (UnLtd). Not all social entrepreneurs run social enterprises and not all social enterprises may be running at a profit (multiple bottom lines). 2

3 Over 50% of social enterprises are located in 40% of most deprived areas and play a role in urban regeneration One in five social enterprise has an annual turnover of 1 million 238,000 people are trying to start social There are over 62,000 social enterprises in the UK The largest representation of social enterprises are in Health and Social Care(33%) Social enterprises are usually led by change agents or community champions The turnover of social enterprises is estimated at 27 billion and their contribution to GDP is 8.4 billion Ventures (Source GEM report) Community ownership Profits ploughed back into the social enterprise business/community Goodwill from the public and government Driven by social needs and failures of stakeholders Innovative and resourceful due to resource limitations It is less expensive to start A volunteering culture They use simple and effective business processes Start up capital raised through grants, funding, donations, loans and in kind funding Social Enterprises Community ownership Profits put back into the social enterprise business Goodwill from the public and government Driven by social needs Innovative and resourceful due to resource limitation and social needs It is less expensive to start a social enterprise Social Enterprise have many workers who are volunteers Social enterprise use simple and effective business processes Start up capital raised through grants funding, donations, loans and in kind funding Private businesses Owned by Shareholders Profits shared by owners Goodwill has to be built up over long periods of time Almost all the workers are employed Driven by profit Staffing culture May require a lot of money to set up Start up capital is raised by shareholder investment and loans 3

4 Social Objectives Social Objectives Environ- mental Objectives Business Objectives A lack of start up funding Staffing vs. volunteering approaches A low turnover Start up interventions can be demanding A lack of entrepreneurial skills Capacity building requirements Charity Social Enterprise Mulgan (2006) defines social innovation as referring to new ideas that work in meeting social goals. Curtis(2010) states that social innovation is key for social enterprises. It is deemed to be the feature that distinguishes them clearly from charities It is also the feature that sustains them as innovation gives an organisation adaptability and control Product innovation Service innovation Process innovation Position innovation Strategic innovation Governance innovation Rhetorical innovation 4

5 A mission statement defines what your social enterprise does and why it exists; it is commonly called an enduring purpose (Allen and Catriona 2007) Golden Vessels(GV) uses social enterprise models to empower at risk young adults, particularly those experiencing social exclusion and unemployment. GV aims to: Encourage young people Create employment Support the creation of social enterprises Give at risk young adults a voice (c) c.oham 2010 Introduction to Social Enterprise A social enterprise can assume various legal forms, however the three most common are: Unincorporated association Company limited by guarantee Community interest company (CIC) Human Resource Marketing Finance Operations/Business planning 5

6 Marketing is all about identifying and satisfying customer needs in a profitable and socially responsible way. The elements are: Product/ Service Place Promotion Price Effective marketing requires a business person to first understand their unique selling point The Market (market report statistics/ data required here e.g. Mintel) E.g. type of trends, size Market Research Methodology Desk: e.g. Internet Field: e.g. Questionnaire, Exhibitions,Observations,Placements Questionnaire Analysis Customer Profile (Demographic, Geographic, Psychographic, Behavioural ) Competitor Strengths & Weakness Assessment SWOT of Product/Service SWOT analysis of the social enterprise in comparison to other competing firms Human capital Social capital Economic capital Environmental capital Cultural capital Symbolic capital Spiritual capital A budget A cash flow statement Breakeven analysis A balance sheet Profit and loss statement Sales forecast A bank statement 6

7 Social enterprise aim to be fully self funded, however, this is not always the case, they can have a combination of funding dimensions which include the following: Grant funding Partly grant funding Earned income models It is critical to structure the social enterprise to have a combination of income sources. Trading /earned income activity Government Foundations Umbrella bodies Strategic agencies Individuals and philanthropist Endowments Sponsorships Planning really happens in four stages: Deciding general goals Setting objectives Creating action plans Understanding the strategic position A business plan isn t just something you need in order to raise funds. It will also help you clarify your strategic thinking at an early stage and provides a road map for the future of your business even if the No. 1 goal is to raise funds 3i Venture Capital website (c) c.oham 2010 Introduction to Social Enterprise 7

8 ALUO METHOD: A: Advantages L : Limitations U: Uniqueness O: Opportunity OR PESTLE TOOL: P:Political E:Economic T:Technological S:Social L:Legal E:Environmental Embedded Social Enterprise Social Programmes + Enterprise Activities SWOT ANALYSIS Embedded Social Enterprise: The social programmes and business activities are one and the same Examples include Fifteen, Sunlight Gillingham (Source: Kim Alter, Virtue Ventures) Social programmes Enterprise Activities Social Programmes Enterprise Activities Integrated Social Enterprise: Social programmes overlap with business activities. This is known as mission related whereby both businesses create synergy's e.g. Hackney Community Transport (Source: Kim Alter, Virtue Ventures) External Social Enterprise: social programmes are distinct from social activities. The enterprise activities are external from the organisations operations but supports its enterprise programmes through supplementary funding e.g. Oxfam Shops (Source: Kim Alter, Virtue Ventures) 8

9 1. Identify the problem/need: research 2. Find out what the needs and business opportunities exist in your Parish: resources, internet, LGA s, Statistics, etc; 3. Do a skills audit for your team, find out your strengths and expertise,remember your SE can be different from the social problem you are addressing; 4. Be innovative and creative e.g. you do not need money to start but capital e.g. partner and collaborate 5. Start as a pilot project and learn, adapt or kill off as you go along 6. Scale up your operation after a successful evaluation of the pilot. Act as a catalyst and enabler for the creation of SE in the community Set up social enterprises in their church Collaborate with other organisations (local, national and international) to set up social enterprises. (c) c.oham 2010 Introduction to Social Enterprise Write down your business idea for a social enterprise initiative that you can start. List two business objectives that you will need to action before start up 9

10 Aston- Mansfield: (Durning Hall, Froud Centre, CIU) mansfield.org.uk/ Community Links: links.org/ West London initiative on single homelessness: Shelter: The Big Issue: Crisis: Fifteen Foundation: Zaytoun: Oromo Coffee: Grameen Bank: info.org; BRAC: aarong.com; Present Aid: Research and publications on homelessness: and see their magazine`postings` look for case studies International NGOs - links.htm Allen A and Catriona M (2007) Setting Up For Success A practical guide for community organisations Community Development Foundation London Curtis T (2010) The challenges and risk of innovation in social entrepreneurship Gunn R and Durkin C (2010)Social enterprise a skills approach Policy Press Dees J G (2007) Taking Social Entrepreneurship Seriously Transaction Social Science and Modern Society Vol.44 No 3 p Gunn R and Durkin C (2010) Social enterprise a skills approach Policy Press Lyon, F., (2007) Social Enterprises in Health and Social Care: Prospects and Challenges. Paper Presented to Social Enterprise research Conference, London South Bank University, July (8th January 2009) Office of the Third Sector (7th February 2009) Morris, M. and Schindehute, M. (2005) Entrepreneurial Values and the ethnic Enterprise: An Examination of Six Subcultures Journal of Small Business Management (4), pp Mellor RB Coulton G Chick A Bilfulco A Mellor N Fisher A (2009)Entrepreneurship is for Everyone SAGE Oham et al (2009) Social Capital and Social Enterprise and Public Health in Stewart, J. and Cornish, Y. (2009) Professional Practice in Public Health Reflect Press Devon 10