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Business for Good: 8 Tips to Creating a Social Enterprise

By: Luke Britton


a diverse group of young people

Social enterprises have become a popular and viable path for self-employment and job creation. Any business focusing on a solution for a negative human or environmental condition can be considered a social enterprise.

So, whether you want to form a nonprofit, charity, or for-profit organization, this is a list of tips for creating a social enterprise that makes a difference in the world.

Defining Your Mission

Identify the Social Issue You Want to Address

The social issues you want to address should vehemently align with your values and interests. It’s much easier to put effort into something about which you’re passionate.

However, it’s important to ensure that your mission is also based on street-level research and that you have realistic goals. Be open-minded and keep your ideas open-ended. Go out into the real world and gain a better perspective on how people live and the challenges they face. 

Thorough research helps to identify a gap. And it is preferable to forcing your ideas in a specific direction.

It also helps to assess your own personal and professional strengths, skills, and experiences. 

Develop Your Mission Statement and Theory of Change

A mission statement is a brief description of what you care about, what action you aim to achieve, and how. And a theory of change is defined as a method that details how you will achieve your specific social goal.

A successful mission statement is simple and memorable. Quantifiable and specific. Clear and focused. And it represents your organization’s values. 

Tesla’s mission statement, “To accelerate the world’s transition to sustainable energy,” is an example of an effective one. It’s succinct, has personality, and portrays a clear purpose.

To form a successful theory of change model, you want:

  • Set objectives
  • Detailed action steps
  • Expected, tangible, and numbered outputs
  • Predicted resulting changes
  • Predicted ultimate impact

Building Your Business Model

Choose the Right Legal Structure

A legal structure determines factors such as taxes, grants, and investments. Start with choosing the legal structure that suits you best. 

Common social enterprise legal structures include an unincorporated association, a company limited by guarantee, a company limited by shares, industrial and provident society, and a community interest company.

A charity, for example, can be an unincorporated association – it benefits the community, can raise funds, and has tax exemption benefits. 

A company limited by a guarantee structure is a popular one in the social sector. Although there is more responsibility involved and donations are more difficult to raise, this structure allows for a great deal of change to be made.

Determine Your Revenue Model

In the social enterprise world, a revenue model is defined as a framework for generating income, measuring long-term profitability, and managing revenue streams. And you have multiple to choose from.

You’ve got the entrepreneur support model and the employment model. Both are in the working sector, helping businesses and unemployed individuals to get on their feet.

Many hospitals, schools, and museums use the fee-for-service model, charging for a socially beneficial service. The low-income client model does the same but focuses on impoverished individuals (e.g. CIDA).

You also have the popular cooperative model, the service subsidization model, the organizational support model, the market intermediary model, and the market linkage model.

Develop Your Marketing and Branding Strategy

Marketing and branding are relatively simple.

As with other businesses, you still need to capture your target audience’s attention, provide applicable content, prompt website visits, and promote engagement. But a social enterprise’s rationale is different.

Social enterprise branding is mission-based and communicates your values, motivation, and impact. You want your audience to feel they are doing good for the world with every purchase.

Audiences love a good social media challenge. Remember the ALS Ice Bucket Challenge? This captured attention by locking onto something trendy while promoting their social cause.

Building Your Team and Network

Recruit the Right Team Members

Naturally, recruiting the right team is a huge determining factor of success. Recruit like-minded individuals with similar values (preferably with different skill sets). For example, if you’re not familiar with social work, why not recruit someone with an MSW?

There is also the importance of employee diversity for business growth to consider. And there are various ways to combine these 2 aspects of recruitment.

During recruitment, make sure to emphasize an accommodating, tolerant company culture in which team members feel a sense of belonging. Eliminate bias in all areas of your organization. Provide diversity awareness training. And make team members feel safe and listened to.

Build a Strong Network of Partners and Supporters

It’s important to also consider how relationships with other organizations can help you.

Your social enterprise could have a bigger impact in partnership with a pre-existing organization. An organization on a similar venture, perhaps?

One tip is to approach a larger, socially-conscious enterprise. Find an organization with an established infrastructure that could help get your idea off the ground.

Always approach potential stakeholders with the expectation of them giving you honest and informed opinions. Be open to consultation and counsel.

Measuring and Communicating Your Impact

Develop Impact Metrics and Evaluation Tools

The theory of change model was mentioned above. The next aspect of this model is the measuring of your actual results. This is necessary to measure the impact of your social enterprise over time.

An annual review of your stakeholders and beneficiaries is a good place to start. This can be achieved through questionnaires that you can input into a tracking system (e.g. Excel).

A tracking system is vital since success is measured by comparing your organization’s results. Follow this up by making any adjustments that you see fit. 

Published: March 16, 2023

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