Sharing lessons on social enterprise from the United Kingdom Mark Brown

Social Spider CIC Set up in 2003 with no start up capital at all Survived early days by support in kind (office space in return for providing services) Traded with contacts from former professional life Worked primarily on web and young people's projects

Social Spider CIC Changed direction in 2006 with the development of One in Four magazine & Ongoing contract to deliver participatory young people's magazine for London borough of Hackney

What do social enterprises do? To put it very simply, social enterprises make social good happen by selling people goods or services they want to buy at prices they are willing to pay and making enough money doing that to keep going

“a social enterprise is 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” Department of Trade & Industry, 2002

Bad reasons to start a social enterprise You’ve heard that social enterprise is the next big thing Your charity has had its funding cut and you need to generate some more income Your charity can’t get a grant to pay for its services so thinks it will try to sell them instead

More bad reasons to set up a social enterprise Your department is being abolished and your line manager has told you to set up a social enterprise The ‘development funding’ your organisation has received includes a target to ‘set up at least one social enterprise’ You’re not earning very much money working in the public sector/voluntary sector and would like to earn more

Good reasons to start a social enterprise You’ve spotted a social problem and you’ve got an idea for a business that could tackle that problem You need a job and you think that you can do something socially that will generate a sustainable income You’ve been delivering a service within the public sector and you think you’d be able to provide a better and/or more sustainable service by starting an independent business

You need to know who is going to buy what you're selling There are three main ways that social enterprises generate value 1. The activity they undertake to make money has a social value in itself 2. They undertake a particular activity in a way that generates social value 3. Their trading activity generates profit which they invest in social value

It is very easy to get confused about which of those three ways of generating value you are looking to use.

Example: You open a social enterprise cafe You could: 1. Use it as a way of training young people 2. Run it as a straight cafe but only sell organic food 3. Run it as profitably as possible then invest profits in community The chances are that you'll find it difficult to do all three of those things at once and be sustainable.

Not all social enterprises sell to the same types of customer There are three main markets to which social enterprises sell goods and services 1. Straight to the consumer (B2C) 2. To other businesses or charities (B2B) 3. The public sector (Strictly speaking, they are also selling outcomes to grant funders)

The biggest challenge The biggest challenge in social enterprise is meeting your social goals by selling the right things in the right way to the right people at the right price

Social enterprise must have equal focus on 'social' and 'enterprise' Social enterprises spot gaps and fill them in entrepreneurial ways

What about Social Spider CIC? Social Spider CIC draws its revenue from a mixture of trading activity and grants It sells goods and services to a range of different markets Social Spider CIC has an asset lock which means although directors can be paid, the assets profits of the company must be reinvested in the community It is in the process of measuring the outcomes of some of its activities

One in Four, our flagship project has gone through three distinct phases in the quest for sustainability. We always knew we wanted it to be available for free to as many people as possible but this posed the question: Where will the money come from to make it happen?

Three distinct models for One in Four 1. We'll get a grant to pay for all of it 2. We'll get a grant to pay for some of it and then we'll charge large organisations for copies 3. We'll charge large organisations, we'll offer individual subscriptions and we'll do other mental health related work to subsidise it

What have I learned? Working out what social change you want to see is often easier than working out how you're going to make it happen Being able to tell the story of your business and the social value you generate is important but it often doesn't matter to consumers Business runs at a different timescale to charities and the public sector Working out what people will pay for is vital to the entrepreneurial process

Am I glad I work in social enterprise? Social enterprise gives huge freedom to make things happen without waiting One in Four magazine would never have happened if we hadn't just gone for it and tried to make it happen

How many social enterprises are there in the UK? Department of Business, Innovation and Skills’ Small Business Survey (published in 2011) estimates 68,000 social enterprises in the UK Respublica / Unltd estimate 238,000 people running or attempting to start social enterprises Social Enterprise Mark ‘the only certification authority for social enterprises’ awarded to 462 organisations

Mark