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In the past, most people started businesses with the express aim of maximising profit. However, in the last two decades, a new type of business has grown exponentially in popularity: the social enterprise.
A social enterprise is a business that focuses on people and the planet, as well as profit. Social enterprises tackle social and environmental problems, improve communities, provide access to opportunities and generally work to make the world a better place.
Creating a social enterprise can be a fulfilling, exciting endeavour. To succeed, aspiring social entrepreneurs need exceptional business and management skills. They need to understand what competencies they require and how to build them up, such as through advanced education in business and management.
What is a social enterprise?
When it comes to starting a business, many entrepreneurs are choosing to start a social enterprise. A recent report by the British Council suggested that globally, there are more than 11 million social enterprises.
Despite that striking figure, no national or globally agreed-upon definition of what a social enterprise is exists. However, it’s generally understood that social enterprises have these three features in common:
- A mission. A commitment to a social or an environmental mission is front and centre in the business and equally important to the pursuit of profit.
- Products or services. A significant portion of income is earned by selling goods or services (as opposed to fundraising or taking donations, which is typical of not-for-profit organisations).
- Revenue for profit. Surpluses or profits are directed to the mission. It’s expected (and accepted) that social enterprises will make a profit however (which differentiates them from not-for-profits).
Social enterprises also differ from typical businesses or startups in other ways. Whereas a startup may have a visible leader and build a culture around the leader’s personality, a social enterprise usually has a mission that drives it.
Social enterprises are also more likely to be new businesses. The majority founded in or after 2010, making many less than a decade old.
