Many have asked the question – what is special about social enterprise? Is it a trend or a fad? Social enterprise has been around for almost a century through the groundbreaking work of pioneers such as YMCA, Goodwill, and Girl Scouts. It has recently taken root in the social nomenclature and almost 50% of all social service agencies have adopted it as not only a principle to earn income for their organization, but as a way to advance the social and economic goals of the community. In Cincinnati alone, based on a survey conducted by Flywheel: Social Enterprise Hub, it was estimated that 30% of local nonprofits operate a social enterprise. Of those operating social enterprises, 50% operate one social enterprise, 30% operate two social enterprises, and 20% operate three or more social enterprises. 44% of these organizations started their first social enterprise in the last decade. Based on these results, social enterprise is not a fad, but instead is a paradigm for how many nonprofit organizations are serving their mission as well as earning unrestricted income to support their organization.
How do you start? Whether you are new to social enterprise or starting another social enterprise, you begin the same way:
- Uncover your strengths: Research suggests that the most successful enterprises (for-profit or social) leverage each individual’s or organization’s strengths. Begin with your staff and/or board and brainstorm – what do we have, do, or know? Think broadly about your unique assets. For example, you may operate a Meals on Wheels program for your local community, but use the kitchen only from 1-5 PM and the kitchen could be utilized for more.
- Evaluate your strengths: After you identify your strengths, vote on the top 5 to 7 strengths based on which are most unique, have value to others, and are closest to your mission. Using Handout A, walk through each question for each top strength and identify possible opportunities. Based on our previous example of the kitchen, you have many opportunities – rent the kitchen to others, start a catering business, or provide additional meals.
- Assess your opportunities: After you identify your opportunities, vote on the top 5 to 6 opportunities and then walk through Handout B to assess their promise based on ease of implementation, mission fit, and profit. With these scores, you will have an objective assessment of which opportunities have the most promise.
Social enterprise is not right for every organization – it requires the right opportunity, the right timing, and the right process. Once you determine that all of these are aligned, take each opportunity and conduct a feasibility assessment. The feasibility assessment allows you to “fail early and cheaply” and helps you decide on a go or no/go decision. If the feasibility assessment is promising, the next step is developing a business plan to create a roadmap for the social enterprise. In future editions we will further detail each of these steps, but feel free to email us with questions. For additional information, Social Impact Architects also offers workshops on Social Enterprise 101, Social Enterprise 201, Business and Financial Models, and Business Planning in communities across the country.
We are also excited that the next edition of our blog will cover the latest thinking and trends LIVE from the Social Enterprise Alliance Summit in Minneapolis, Minnesota next week. If you want real-time updates, follow us on Facebook, LinkedIn, or Twitter.