Is your social enterprise just social without enterprise?

Social entrepreneurship is more than just helping people because you want to help. If people help each other, it is fantastic, but if you want to dedicate your life to it as a social entrepreneur, you need a clear idea on how to make money and how to create a win- win situation.
It wouldn’t be just wrong, but also unethical to start without a business plan, because you will fail and leave behind a mass of hopes and people who have counted on you.
Unfortunately, gaining money is not just a secondary effect, which comes automatically. It is not enough to be a do good person with all your energy and to think that this means also a regular income and the financial basis for growing and scaling up your business.

The operative word here is “enterprise.” The fact that the revenue and operations of your businesses are earmarked to achieve a social objective (i.e. job creation, environmental sustainability, education reform, etc.) does not change the fact that this is a business which must be designed to make money. It is the profits from the enterprise that must finance the servicing of the social mission. If you are not prepared to come up with a profit-making plan for your social enterprise, you’ll do better to just take the capital you plan to invest toward the venture and use it as a donation to a charitable organization that shares your cause… you can’t make money if you give your products and services away for free…Don’t offer “hook-ups” without a clear rationale for how they will drive sales. Without a clear profit-making plan, you won’t find that rationale, and you’ll be easy pickings for family, friends and others who will only take you as seriously as you take yourself as a business owner.

(source see below)

So, which are the main elements of a business plan?
Business concept. Describe what will be sold, to whom and why the business will have a competitive advantage.
Financial features. which are the important financial points, sales, profits, cash flows and return on investment. Capital needed to start the business and to expand. It should detail how the capital will be used.
Legal issues legal form of operation, the principal owners and key personnel.
What about patents, prototypes, location of a facility, any crucial contracts?
Marketing and communication activities Who should know about it? How to set up your network? Which events are relevant to your activities? What about offline materials (brochures, poster, business cards…) What about digital activities (website, blog, Twitter, forum engagement …)?

Business driven activities are often underestimated in terms of time and resources.
You should dedicate at least 50% to it, because it will ensure that your social engagement can become really successful.

Related material:
4 Signs You’re Not in It for the Money

One Comment Add yours

  1. Reblogged this on Go India, go future! and commented:

    Sustainability is simply key. Without being entrepreneurial all social activities will stop once funding or your own engagement stops.


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