Social enterprises adopt a variety of legal structures. While the term ‘social enterprise’ may define specific examples of community businesses, many voluntary and community organisations and charities currently operate as social enterprises by trading and through generating their own income.
A key advantage of a social enterprise model over a traditionally funded community or voluntary group is the independence to be entrepreneurial and the ability to generate an income outside of charity restrictions. This means that your business can generate income that is not restricted solely to meeting your aims and objectives.
But while it is possible for a social enterprise to also be a charity and take advantage of a range of tax benefits, being a registered charity may restrict certain trading activities that the organisation can undertake.
The point to bear in mind is that social enterprises are businesses. They need to follow a financial model and, while meeting a social aim, must develop the skills required to run a commercial business.
The key starting points for social enterprise may be to:
- Clarify your objectives: be clear about your social and business goals
- Decide on your business model
- Research similar businesses or projects for ideas and inspiration
- Develop a business plan
- Identify the market for your product or service.
Have you looked carefully and realistically at all the costs involved, the risks, the competition, the skills and resources required to run your community business? Can you generate enough income to keep your business sustainable?
