Social Enterprise: business or charity?
A Social Enterprise is a business which puts its profits into social and/or environmental programmes. And according to recent government figures, the sector is booming – accounting for 5% of all businesses and contributing £8.4bn a year to the UK economy – almost 1% of annual GDP.
One of the problems with the Social Enterprise concept is that anybody thinks they can do it, assuming that the nearest public body (council, regional development agency, government department) owes them a living. These groups tend to be focussed “a bit too much on the social and not enough on the enterprise” and usually fade away grumbling into their beer, cursing “the man” for not giving them the backing they deserve.
Good Social Enterprises, on the other hand, act and feel like a business. Visit the furnishing provider/recycler FRC Group in Liverpool and you will be given a funky visitor’s badge by a smart receptionist. The ethos is not just skin deep – the company has won awards for its employment practices and sustainability reporting. They do charge their clients a premium, but for a premium service that a commercial company would struggle to provide. Everything is professional – not a grumbling hippie in sight.
The same principle applies to a ‘green business’. Green businesses are not charities – you need to compete on price and quality with mainstream businesses, but push your green credentials as a market differentiator. If you expect someone to throw money at you just because your product or service is eco-friendly, then you are in for a big shock. I’ve seen it happen many times and it always ends in tears. Be warned.