5 Important Points to Consider When Starting a Social Enterprise.
If you’re thinking of starting a Social Enterprise think of this article as the equivalent of the shopping list you scribble down before you go to the supermarket. You’ve made a note of the essentials that you don’t want to forget but there is more to your shopping trip than what is on the list, just as there will be more to building your social enterprise than what you read in this short article.
Before we go into the five important points there is actually a secret point zero, that if you don’t have an answer for then you’re not ready to build a social enterprise.
First and foremost you must ask yourself why you are doing this. Why a social enterprise and not a corporate one? Why an enterprise based on whatever you have chosen to base it on? The foundation of any successful social enterprise is passion and a deep rooted belief in what you are doing. All entrepreneurs will start with a dream but only those willing to be 100% honest with themselves will know if they have what it takes to make that dream a reality.
Okay so you’re still reading, that’s a good sign, let’s look at point 1:
1. What is your plan?
And if it fits on a napkin it is not a plan! Bottom line a Social Enterprise may be nonprofit but it is still at its core a business, so it requires a full on business plan. This plan will require hard work and research, you need to put pen to paper (or fingers to keys) make a note of your objectives, your goals (both long term and short term), and the mission of your business. Its purpose needs to be clearly defined.
Your plan also needs to include who your target audience is and most importantly in planning terms, an inventory of your resources, what resources you still require, how you might go about getting them and do you have enough resource to launch the enterprise.
The better your plan, the more chance your business has to succeed, but it is easy to get stuck in the planning stage, there will come a point where you have to go and make it a reality, if you equate the plan to your dream well then you have to wake up and get up to make it happen!
2. Qualifying for Non-profit status
Social enterprises need to adhere to certain rules and regulations in order to qualify for non-profit status. In broad terms there are two types of non-profit organisation; public charities or private foundations. Rules also differ slightly depending on the country you are setting up your organisation in so make sure you do your research, read the legislation provided on government websites. As stated earlier a social enterprise is still a business so it is required to be registered and a number of legal forms need to be filled out in order to make it legitimate.
This is a very important step to making your enterprise a reality so don’t be deceived by the shortness of this point.
3. Board Members
You’ve got your mission (the goals and objectives of your enterprise); you’ve got your ship (your enterprise) and now you need your crew. The first members you’re going to want to bring on board are your bridge crew, in business terms these are your board members. These people are going to be involved from the ground level up so they’re going to need to be as passionate about what you are doing as you are, they will need to be 100% committed. Unfortunately when it comes to who you invite to your board they’re going to need to be more than passionate and committed, they need to be useful. They have to bring something to the table that you need. You’ll need a diverse group of board members all bringing something different to help construct the enterprise, you’re going to need people who bring money, connections, knowledge and backbone, it's
no good having board members who won’t question you when they think you’re wrong. You’re all in this together; they need to be people you can trust and people you respect.
They also need to be people you can work with, and work closely with because at the end of the day these people aren’t just going to be your friends; they’re going to be your partners.
We live in a world where branding is everything. We call everyday items by their brand names, e.g. we refer to cola as Coke, and we call vacuum cleaners Hoovers. So your name, logo and message need to be memorable, and easy to understand. If you have to explain it you are already lost.
It also has to be unique, both for legal reasons and the fact you want people to think of your business and only your business when they hear it.
Run it by groups of people before you set it in stone, just because you think it sounds great doesn’t mean everybody will!
5. Legal Structure
This is where reading article after article and scouring Google will not help you, well it won’t help you enough. Becoming more knowledgeable on the subject is an advantage but you will want to hire a professional for when it comes to putting all the legalities in place.
Your legal structure will need to be solid not only to protect you, but your fellow directors, any volunteers or employees you bring on board as well as investors and donors.
All the legal jargon may be confusing and overwhelming but that’s why you’re paying a professional. Once everything is in place you will be ready to make dreams a reality.
So there you have it your social enterprise shopping list, keep it in your back pocket and refer to it as you put your proper plans in place to start your very own social enterprise.