Expert advice: planning for success and failure in social enterprise

 

Guardian Social Enterprise | 13 December 2012

 

How to begin a busines plan

 

Colin Crooks – author and director, Tree Shepherd

 

Plan your use of time as well as money: It is important to decide exactly what the social element will be, how it will be delivered and what it is likely to cost both in terms of cash and just as importantly time. As an example, genuinely helping long-term unemployed peoples requires a lot of extra supervision and oversight and that has to be factored into the business model right from the start.

 

Socially conscious staffing: Aligning the social outcomes to the business is essential as it means you don’t have an internal tension on what to prioritise. I have run a number of recycling and re-use operations where I’ve consciously employed long-term unemployed and otherwise hard to employ people. They’ve worked and been trained in all aspects of the business. In this way I find the two objectives are aligned; the more business I generate the more work there is to do, and the more people I can employ and train.

 

Changing needs: The key is to establish that there is a market irrespective of trends and that you have a business model and a skill-set to deliver to that market. Commercial thinking, yes, but closely wired in with a good understanding of the needs you address and how they are changing.

 

Different approaches: I’ve used three approaches to growth – organic , franchising and contracting. Organic is easier to understand, generally easier to control (except if you get a huge contract suddenly) and generally easier to plan for, especially in terms of senior management and the skill sets you will need. However, it is slow and restricts what opportunities you can go for. Franchising is difficult; the model has to have quite a lot of margin in it in order to pay the franchisee and the franchisor, and the costs of monitoring, quality control and providing enough business to the franchisee should not be under-estimated. Contracting worked well for me; when faced with a huge upsurge in business for which we didn’t have the capacity, I contracted with another social enterprise. I kept the values intact, but increased my capacity to deal very quickly and with relatively low costs compared to the franchising approach.

 

Assess your clients’ needs: Think carefully about what your clients or cause needs most, and then think through how providing that need can generate income.

 

 

Annika Small – chief executive, Nominet Trust

 

Understand your market: A social enterprise needs to understand its market and its customers, developing a product or service that will meet their needs. This requires working closely with prospective end users to identify their challenges and understand what intervention is likely to help. A social enterprise needs to start with a clear proposition and evidence of market demand in the same way as any commercial organisation building a business plan.

 

Use metrics to measure impact: There are some powerful tools available that capture the stories of how engagement with the social enterprise has impacted the beneficiary. This helps to embed the evaluation of social value and creates meaningful, user-based metrics.

 

Social value is subjective: One of the reasons that no-one has cracked measuring social value is that it isn’t an objective thing. Social value is inherently subjective so it’s no surprise that project leads, partners and funders focus on different measures, depending on what they believe matters most. I’m not convinced that it is realistic to attempt a shared set of metrics, but instead perhaps we need to find a way to translate the different expressions of social value more effectively.

 

Tools for measuring impact: I recommend checking out the storytelling, monitoring and evaluation method offered by Cognitive Edge and demonstrated by Global Giving.

 

Be patient: The best leaders of social enterprises are those that can balance passion for their cause, commitment to making a difference and patience in understanding that social change can take time.

 

Digby Chacksfield — founder, Eastern Enterprise Hub

 

Support networks: Creating a network of capable supporters who can offer practical help, advice and guidance is very important. Business plans shift, change and develop in this context and, controversially, may not be needed at the start, but become more once the directions of growth have been established.

 

Social impact bonds: There seems to be a lot of noise about payment by results and social impact bonds offering the potential to support social enterprises but I have not found a good early example of this working. Has anyone else?

 

For the complete article, click here  Photograph: Sarah Lee

 

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