How to kick start your Social Enterprise- and what you need to know.
What is a Social Enterprise?
There are over 100,000 social enterprises throughout the country. Contributing £60 billion to the economy and employ two million people.
Firstly, Social Enterprise, Charity, Community Interest Company (CIC) all appear to have a similar goal. That is to help with the well-being of the community.
Secondly, they exist to help solve social needs or problems. Starting a social enterprise can be exciting, challenging and scary. However with the right support you will be able achieve your goal.
Social entrepreneurs can make a good profit themselves and benefit others by reinvesting profits back into the business. There is no legal definition for a social enterprise. Likewise they can be of any size; national to international or small community-based enterprises.
Sounds just like charity work, right? Well, charities often operate as social enterprises. But they cannot make a profit as all income must be reinvested in making a difference to the cause. There are no owners or shareholders who benefit from it. However there’s a board of Trustees, who are responsible for making sure management are running it properly.
Types of Social Enterprises
Community Interest Company (CIC):
Above all a CIC is owned by the local community. They are ran to benefit local people/communities unlike private shareholders. Most importantly it involves trading a product or service, such as community centres, social clubs, nurseries etc.
CIC structure can be:
• a private company limited by shares. Where you have shareholders and directors. Directors can receive up to 35% of the surpluses as dividends.
• a private company limited by guarantee. This does not have shares or shareholders and cannot pay dividends, only directors.
This is where members share the profits/loss or benefits. The approach is owned, controlled and run by its members who subsequently benefit from it. Every Co-operative is either a Company Limited by Guarantee, a Co-operative Society or a Community Benefit Society.
Credit Unions. Financial institutions that provide savings and loans for their members
Housing Association. Offering help and support to vulnerable people with housing needs
Social Firms: Provide guidance and opportunity for individuals who are less able or with mental health issues.
In conclusion, when social enterprises make profit, societies and local communities also benefit. As a result this creates employment opportunities and more innovation. Such as, introducing new services to support vulnerable people etc.
To sum up a social enterprise reinvests profit to help create more projects & employment. Likewise protecting the environment and providing services to people otherwise not have access to.
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