Social ENTERPRISE: NEXT GENERATION

Transcription

1 Social ENTERPRISE: NEXT GENERATION TOOLBOX

2 SOCIAL ENTREPRENEURSHIP Social entrepreneurship is the activity of establishing new business ventures to achieve social change. The business utilises creativity and innovation to bring social, financial, service, educational or other community benefits. (Talbot, Tregilgas & Harrison, 2002) Social entrepreneurship creates innovative solutions to immediate social problems and mobilizes ideas, capacities, resources and social arrangement required for sustainable social transformation. (Alvord, Brown, & Letts, 2004) Social entrepreneurship is a process of creating value by bringing together a unique package of resources to exploit an opportunity, in pursuit of high social returns. When we want to help the poor, we usually offer them charity. Most often we use charity to avoid recognizing the problem and finding a solution for it. Charity becomes a way to shrug off our responsibility. Charity is no solution to poverty. Charity only perpetuates poverty by taking the initiative away from the poor. (Muhammad Yunus, social entrepreneur Winner of Nobel Peace Prize in 2006) Social entrepreneurship is not a charity or a welfare agency, but a private business with emphasis on human values (rather than just profit). Its focus is on working with and enhancing the social capital within the community by encouraging participation, inclusion and utilising a bottom-up approach to achieve social change. 1

3 Functions of social entrepreneurship To create and maintain a stable level of employment; To create jobs and provide support to socially vulnerable groups; To promote the development of entrepreneurial skills; To compensate countries narrow place; Social entrepreneurs create social innovation and change in various areas, including education, health, environment and business development; Social entrepreneurship reduces poverty risk. Social entrepreneurs create social progress by applying the entrepreneurial orientation in order to move us closer to our social goals in a sustainable way. When prevailing conditions in a society fall short of our goals for a prosperous, harmonious, just, healthy society, this creates a social problem, but at the same time, an opportunity for progress. Characteristics of a Social Entrepreneur: Not bound by sector norms or traditions; Not confined by barriers that stand in the way of their goals; Develop new models and pioneer new approaches to enable them to overcome obstacles; Take innovative approaches to solve social issues; Transform communities through strategic partnerships; Social entrepreneurship meets needs unmet by commercial markets and (usually) the government; Social entrepreneurship is motivated by social benefit; Successful social entrepreneurship usually works with, not against, markets. Young social entrepreneurs worth learning from: 2 Paul Aiken - co-founder of Global Generation which works with young people, including those from youth offending programmes and homeless shelters on environmental and food growing projects. Kamara Bennett - founder of Sew Your Own, a clothes upcycling project involving young people and local fashion students. Edwin Bronsi-Mensah - founder of Give Me Tap, which sells branded aluminium water bottles, which can be refilled for free at a growing network of cafes and restaurants. The majority of the profit goes to water projects in developing countries. Kelvin Cheung - founder of FoodCycle, an organisation which stimulates young people to collect surplus food from restaurants and shops in their area. They then cook the food in empty kitchen space and serve it to those in need. Lily Lapenna - founder of Mybnk, provides workshops and toolkits to help young people understand money and finance. Rui Jorge Ocatavio - founder, of NUTMEG, an organisation running events, debates and festivals to give young people a voice, celebrate their skills and reduce gang culture.

4 Leanne Pero - founder of The Movement Factory, a dance company providing street dance classes for young people on housing estates, as well as dance workshops for schools, youth centres and private companies. Sebastian Thiel - founder of It s Upshot, a clothing and entertainment brand focused on spreading positive messages among young people. Viviane Williams - founder of Wake Up Campaign, a project which aims to raise awareness of social issues through putting together creative events and campaigns. Social vs. Commercial entrepreneurship Commercial Entrepreneurship Represents the identification, evolution and exploitation of opportunities that result in profit. Social Entrepreneurship Refers to the identification, evolution and exploitation of opportunity that result in social value. Commercial entrepreneur may create change in the society, but that is not the primary purpose of starting the venture. Social entrepreneur may generate profit, but for him/her that is not the primary reason for starting the venture. For the commercial entrepreneur, wealth is the same as profit. For the social entrepreneur, wealth also encompasses creation of the social and environmental capital. Examples of successful social enterprises Big Issue 3 In 1991 a news and current affairs magazine written by professional journalists and sold on the streets by homeless vendors was launched by Gordon Roddick, of the Body Shop fame, with partner John Bird, after they were inspired by a similar publication in New York. The Big Issue was set up to give homeless people a chance to earn a legal income, offering an alternative to begging, while using the content to campaign on the behalf of all socially excluded people. It was also designed to provide an example of a successful social enterprise and an alternative to conventional grant-dependent charities and it is not part of any other media group or political party and guards its independence fiercely. Thanks to this, its clear social benefit and a reputation for getting exciting guest editors (including Damien Hirst and Irvine Welsh) as well as exclusive celebrity stories, the magazine became a huge success.

5 With weekly circulation figures topping 135,000 in the UK alone, sales of the magazine can support the Big Issue Foundation, a registered charity providing support to vendors and other homeless people. The foundation was one of the first of its kind to look at the real issues keeping people on the streets, such as drug abuse and ill health and who were willing to listen to the people they were trying to help to come up with radical solutions. Divine Chocolate In the early 1990s, Kuapa Kokoo was set up by a group of cocoa growers in Ghana, West Africa to trade its own cocoa, and thus manage the selling process more efficiently than government cocoa agents. In 1997 the farmers voted to set up their own chocolate company, and in 1998 several fair trade organisations came together to launch Divine Chocolate. Against the odds it has grown to an 8m business with over 35 products available in supermarkets, Oxfam and independent stores and delicatessens all over the UK and now in many international markets too. Divine Chocolate has led the growth in Fairtrade chocolate in the UK, and have set the bar higher by being co-owned by the cocoa farmers cooperative Kuapa Kokoo in Ghana. This way the farmers not only receive a fair price for their cocoa which they invest in community and farm development, but also a large share in the company s profit, and the knowledge and power company-ownership also delivers. 4

6 Green Works Often when companies move offices, huge volumes of perfectly good office furniture are dumped in a landfill, while smaller businesses and charities struggle to furnish themselves. Colin Crooks saw the opportunity to address this problem as well as help marginalised individuals and the environment by setting up the social enterprise Green Works in Starting off with just one van, the company has grown into a 2million charity with five franchises operating across the UK. Green Works has grown to operate on an industrial scale across the country, diverting 60,000 tonnes of furniture that would otherwise be headed to the landfill. It refashions and redirects it on to over 5,000 organisations, including schools, charities and small businesses, saving them over 2.5m in discounted furniture. To carry out this operation, Green Works employs and a train marginalised groups, including homeless people and ex-offenders, and has so far created over 800 training and employment places over the last ten years. In contrast, sending that furniture to landfill would only employ two people. Humana Nova Social Cooperative Humana Nova encourages the employment of the disabled and other socially excluded persons through the production and selling of quality and innovative textile products made from ecological and recycled fabrics for the needs of the domestic and foreign markets. In this way the Cooperative actively contributes to the sustainable development of the local community, diminishing of poverty and nature conservation. External links:

7 HOW TO WRITE A BUSINESS PLAN FOR A SOCIAL ENTERPRISE? Business plan needs to be employed by anyone who is in business. It sets a strategy for future growth and can be used to attract investors and loans. They are also kept and developed over time by existing businesses, and even started over when new opportunities arise. Business plan should have 20 to 25 pages. Business planning helps define and guide: An agreed route for your business; Your key objectives for the next three to five years and how they will be achieved; Directions and timelines in which to achieve your goals; Your day-to-day operations and decisions; A business plan can also be used as a benchmark to measure your progress towards achieving your goals. There are many different business plan templates that different enterprises use and many of them can be downloaded on-line. Here are some parts of business plan: Executive summary The business Key staff Product or service The market Marketing and sales Social purpose Finance 6

8 Business plan in detail Executive summary is an overall summary of your plan. Ideally, it is around one page long. It should give the reader a general feel for your organisation overall objectives, brief description of activities, services or products, what resources are required, where they will come from and who will benefit. You should write it when you finish all the other parts of your business plan. The business is the part of business plan where you give general information about your business plan name, history and description of what the business does, social aims (mission, vision, values) and background information. The purpose of Key staff is to make certain the enterprise has sufficient staff with the right skills and experience to ensure a successful project completion. When thinking about the staff in a social enterprise you will have to have this in mind: Administration, Project management, Finances, Sales, IT, Marketing and Volunteers. Every enterprise should discuss where additional training might be needed to ensure that the staff has necessary skills to execute the activities for each phase. You can make an organizational staff and add it to your business plan. The social enterprise organization chart is a graphical picture of the organization and reporting relationships in it. Here is an example of what Key staff part of your business plan might look like: Job title Role Responsibilities Production manager Sales manager Production staff Logistics manager Administration Human resources Marketing manager CFO CEO Skills & knowledge Number of staff required Training Need Product or service will explain what your enterprise offers and how the products/ services will develop in future. 7 The market part of the plan will be concluded after a market research (which can also be made a part of your business plan, in its entirety or as a summary). Market research is the vehicle for gathering the information that serves as the foundation for the marketing plan. In this part, you will point out who your customers will be, elements of their profile, why they will buy from you, and also provide an overview of competitors, their strengths and weaknesses. The most commonly used tool for analysing the context in which you are placing your product/ service/setting a social enterprise is PESTLE analysis. Here s a layout of the PESTLE analysis:

9 P= Political: along with fiscal and legal context, including EU and government legislation. For example. Social inclusion policies, Community Finance Initiatives grant and loan programmes. E=Economic: both national and local economic factors, such as interest rates, employment levels, and local investment policies. S=Social:(including environmental): includes community issues and priorities, ethical and environmental factors. T=Technology: the implications of Internet trading, other computer based opportunities, and communication technologies. L=Legal: the legal environment that affects any organisation, including the legal status of the organisation itself tax law, employment law, contract law. E=Environmental: the local national and global environmental issues which impact on the organisation. Thinking about the customers you are trying to reach with your product is also a very important part of doing a market research. The following table might help you in defining them: Who will buy your goods/ services? (age, gender, social group, education, ) Why will they buy from you? Do you know how to reach them? Do you know what method of communication is the best? Whenever you are trying to place your product, you have to bear in mind that there are other companies doing the similar thing. Keep them in mind when developing your business plan! Organisation Similarities Differences Relationship 8

10 Marketing and sales is the part where you will point out how will you sell and promote your products or services. It consists of a marketing strategy, a pricing strategy, as well as promotion and advertising strategy. When thinking about your marketing strategy you have to expect change, emphasize relationships, involve everyone, seek alliances and be innovative. Marketing strategy 4P s outline: Product Place 4P s Price Promotion Social purpose is an important part of your business plan if you re creating a social enterprise. In this part you will have to answer the questions like: Who will benefit (in a social sense) from your social enterprise? Why is there a need for this kind of enterprise? Will services and products meet the need? Finances. Most business plans will include a 12-month cash flow forecast (can also be a two- or three-year projection). What makes social enterprise financing special is the wide mix of revenue portfolios: Donations/free riders donations (Institutional/private), Government support, Fees applied for S.E services offered (Earned income ventures) and Board contributions. Budgets are the organizations operating plan for a fiscal period. They express in monetary terms the board s and staff s decisions regarding how the organization will fulfil its stated purpose. The budget explains which programs will be undertaken for the upcoming fiscal year and how they will be financially covered. Budget is a comprehensive look at the organization s overall projection of the revenues, financial support, and expected expenditures. 9

11 To sum up: When writing the business plan keep in mind: Keep your business plan as short and simple as possible; Present your facts and information so they flow logically and make sure the information presented in different sections supports each other; Do not give in to the temptation to overstate the truth, and bear in mind that the figures you present will need to back up the words in your business plan; Start writing your business plan as soon as possible and keep refining your work to keep it as short, simple and easy to understand as possible. The business will change; you will make new products, give new services, or improve the ones that you have. Business plan will not have its purpose if you don t upgrade it every once in a while. Every new version makes it concrete! External links:

12 DISCLAIMER The content of this toolbox does not reflect the official opinion of the European Union. Responsibility for the information and views expressed in the toolbox lies entirely with the authors. 11