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Sustainable Funding Models: trading and social enterprise

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A presentation delivered by Ian Baker, Head of Learning at the School for Social Entrepreneurs, introducing charities to social enterprise, trading and sustainable funding models.

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Sustainable Funding Models: trading and social enterprise

  1. 1. Sustainable Funding Models: Trading and Social Enterprise Ian Baker, Head of Learning, SSE
  2. 2. About SSE Founded in 1997 by Lord Michael Young. We work with start up social entrepreneurs and organisational leads … • Individuals with an idea for a new organisation that will tackle a deep rooted social problem. • AND individuals leading projects or organisations in the private sector, public sector or the non-profit sector. " Everybody has the capacity to be remarkable"
  3. 3. Courses we run ‘Funded’ programmes • Fellowship startup course • Lloyds Bank Social Entrepreneurs Programme One day workshops • Unlocking Social Investment • Sources of Funding • Writing Successful Bids • Kickstart your Social Media Strategy • Introduction to Legal Structures • Working with Corporates • From Asking to Earning • Crowdfunding • Marketing Two day workshops • Leadership Development • Measuring Social Impact Specialist courses • Transition to Trading • Replication and Social Franchising • Action Learning Facilitator Training
  4. 4. Who we work with
  5. 5. What is social enterprise? “Social enterprises are businesses that trade to tackle social problems, improve communities, people’s life chances, or the environment. They make their money from selling goods and services in the open market, but they reinvest their profits back into the business or the local community. And so when they profit, society profits”. SOCIAL ENTERPRISES SHOULD: • Have a clear social and/or environmental mission set out in their governing documents • Generate the majority of their income through trade • Reinvest the majority of their profits • Be autonomous of state • Be majority controlled in the interests of the social mission • Be accountable and transparent Source: SEUK
  6. 6. State of social enterprise (2013) • 2m people engaged in entrepreneurship for social or community purposes & 238,000 trying to start a social venture • 72,000 social enterprises (164,097 charities & 1.2m SMEs) • >2 Million staff employed • 39% based in deprived areas • 59% grew last year compared to 28% of SME’s • 57% predict growth next year • 38% led by women • 75% actively involve beneficiaries in governance Source: SEUK
  7. 7. The income spectrum
  8. 8. Trading: Buying & selling in the open market for profit Opportunities Risks • Can generate unrestricted income • Needs a good idea (to compete in market) • Potentially provide long-term viable funding • Can take time to a profit (might make a loss) • Can unleash to meet customer needs • Existing people not have the skills/mindset • Customers, not funders, determine service provision • It might fail
  9. 9. Who do charities trade with? Earned income by source, 2000/01 to 2011/12 (£ billions, 2011/12 prices) Source = NCVO 2014 Almanac
  10. 10. Some tips… • Develop services that customers need • Market research: o go and talk to customers o people who interact with customers day-to-day know them best o get potential customers involved/bought in at design stage • Pilot – soft launch – you learn 10 x as much than planning in the abstract (doesn’t have to be perfect) • Pricing – you might need to price low (or discount) to get a foothold • Know your numbers – will it make a contribution to your overheads?
  11. 11. The Ansoff Matrix Market Development • Promoting your existing products in new markets e.g. different geographical areas or new client groups Diversification • Developing a new product in a new market Product Development • Developing a new product or adapting an existing one for your current market Market Penetration • Improving or expanding your existing product(s) in your existing market(s) Existing product New product New Market Existing Market Increasing Product / Offering Innovation IncreasingMarketInnovation Source: NCVO & Social Enterprise Works
  12. 12. Learn more on Transition to Trading A six-day course at the School for Social Entrepreneurs covering: • Legals – what can you trade? • How to have an entrepreneurs approach to new product development • Sales and marketing skills • Leadership and culture change • How to influence people • Enhancing the effectiveness of your staff https://www.the-sse.org/courses/transition-to-trading/

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