Marcus Coetzee
The star of social enterprise is on the rise!
They’re entering the media spotlight; the government is developing various initiatives to support them and universities have started studying them.
In a couple of years, many will be familiar with the concept of social enterprises.
You may have heard of some local examples such as Greater Capital, the Clothing Bank, Greenpop, the Impact Hub and Reel Gardening.
These organisations blend business thinking with social purpose and they overcome some of the constraints facing organisations that rely solely on grants.
This makes them particularly relevant in South Africa’s economic and social climate.
I have been a big advocate of social enterprises since I first heard of them 14 years ago and believe that there is much we can learn from it.
It’s why I wrote an e-book about the insights I collected and it’s also the reason why I put together this series in Small Business Connect.
Over the next ten editions, I will cover key insights I’ve discovered through working with social enterprises and studying how these social enterprises do business.
These insights are intended to complement rather than replace existing wisdom about strategy, leadership, organisational design and culture.
I recognise that social enterprise business models may not be appropriate to many non-profit organisations.
However, I strongly believe that we can all learn about how successful social enterprises operate.
I believe that these principles can be applied regardless of the business model or sector or legal entity or size or stage of development an entity is in.
A social enterprise is an organisation that adopts a business like-approach to tackling a social or environmental issue. It is a “social business”.
Key ingredients include:
- It has an explicit social purpose.
- It generates the majority of its income through trading or business activities.
- It reinvests the majority of profits.
- It seeks to create social value throughout its operations.
- It is accountable and transparent.
- Social enterprises can assume the legal form of a for-profit entity or a non-profit entity – or both, which we will refer to as a hybrid model.
An example of a hybrid is Shonaquip, a South African social enterprise started in 1992 that designs and manufactures mobility devices such as wheelchairs and posture support for the physically disabled.
I have 10 points of advice. I will explain more about in the coming monthly columns published in Small Business Connect.
These are:
- Adopt the social enterprise paradigm and blend business thinking with your social purpose.
- Clearly define the purpose of your enterprise.
- Define the positive outcomes that your enterprise achieves.
- Gather convincing evidence of having achieved these formally- stated outcomes.
- Demonstrate value for money, and refine your business model until this is achieved.
- Earn income; don’t rely on donations for your survival.
- Market your successes more than the social problem you’re tackling.
- Sell benefits to your customers.
- Collaborate with businesses and provide them with real value.
- Develop a powerful brand, around which you are able to deeply engage communities.
I hope you find value in this coming series about social enterprises, and realise how your business or non-profit organization can learn from these ten tips.
- Marcus Coetzee is an experienced strategist who has consulted to non-profit organisations, social enterprises, the government and high-impact businesses over the past 18 years. He also heads up the African Social Entrepreneurs Network. Visit www.marcuscoetzee.co.za.
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