Setting Up Social Enterprises

Jo RansomDirector of SEEE

www.seee.co.uk

What we will cover

• What is social enterprise (SE) – definitions

• Exercise – 101 uses for an empty garage

• SE – business models, legal structures

• Mutuals - definitions

• Charity vs Social Enterprise

• Exercise - Has your trading idea got legs?

• Contact information

SE - definitions

• Not one definition

• Not one legal status

• Not one legal structure“A social enterprise is a business with primarily social objectives

whose surpluses are principally reinvested for that purpose in the business or

in the community, rather than being driven by the need to maximise

profit for shareholders and owners”

“Social enterprise is about doing good business rather than being more business-like at doing good”

Exercise

101 uses for an empty garage

In groups, list all the uses, with a social purpose, you can think of for an empty garage – get your

entrepreneurial heads on!

SE Business Models

• Housing Associations

• Leisure Trusts

• Social Firms

• Development Trusts

Legal Structures

• Industrial and Provident Society (IPS – Co-operative and Community Benefit Society)

• Community Interest Company (CIC – Limited by Guarantee or Shares)

• Company Limited by Guarantee/Shares• Trust• Unincorporated Association• Charitable Incorporated Association

Mutuals

• A mutual is any organisation owned and run for the benefit of its members; no external shareholders and can operate as employee owned, co-operative or wider SE model

• A Co-operative is a mutual organisation run according to a particular set of 7 principles, internationally agreed

• In an employee owned business at least 51% of the organisation must be owned by employees; a controlling stake in the business

Charity and SE

• Charities can have a trading arm (SE) – the SE can covenant any profit back into the charity

• Charity may be more tax efficient but can be inflexible – have to stick to primary purpose – cannot deviate

• A prime example of a charity that works effectively as a social enterprise is Action for Children; in existence for 150 years; 80 to 90% of its income comes from government contracts providing services for children and families around social care, annual turnover <£200m as a result of contracting out services

Exercise

Has your SE idea got legs?

• Does it meet a significant need for your potential customers? 

• Is the market for your product / service sizeable and/or growing?

• Is the market attractive and accessible?

• What’s the competition, and can you realistically compete? 

• Will it require high initial investment 

• Is there likely to be a good return on your investment (time and money)?

• Is there good fit with your mission, values and organisational culture 

• Does it use/develop your existing skills

• Do you have access to potential partners and support networks?

• How risky will it be and can you afford to take that risk?

Handouts

Range of documents in electronic format

‘Is social enterprise the answer for public services’

‘Social enterprise and governance issues’

‘Legal forms for SEs’

‘SE legal structures, at a glance’

Further information – www.seee.co.uk admin@seee.co.uk