The module is intended to provide the learners information about the business model, the specifics of the social enterprise business models, examples of social enterprise business models and steps in setting up a social enterprise.

1. Balkan Women Coalition vol. II
Social Start-Up Booster for Supporting Female Entrepreneurship in Balkans
(2020-1-EL01-KA204-078936)
BUSINESS MODELS FOR SOCIAL ENTREPENEURS AND
HOW TO SET UP A SOCIAL ENTERPRISE

2. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Learning goals
Upon completing this module, you should be able to accomplish the following:
• Explain what a business model is
• Explain the differences between business models of commercial enterprises and
business models of social enterprises
• Describe examples of business models which were successfully implemented by social
entrepreneurs.
• Know how to set up a social enterprise
Keywords: Business Model Social Entrepreneurship Business plan for SE

3. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Definitions
“A business model describes the rationale of how an organization creates,
delivers, and captures value”
Alexander Osterwalder & Yves Pigneur (2010) in Business Model Generation
• The business model, also called economic model,
refers to the economic strategy adopted by a company in order to increase its
profit
• What is the role of the business model?
• Focus on 3 essential points: the market targeted by the company the value creation process and the price
of the added value
What is a
business
model?

4. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Definitions
• Social enterprise business model design:
Combining profit and purpose in practice
• To deliver social impact
• SE have a fourth component in their business model: the “social impact model”
that describes how social impact is generated and drives all business decisions
What is a
business
model for
SE?

5. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Corporate business model vs.
Social enterprise model
Source: https://dragonflycollective.com.au/social-enterprise-business-models-part-
one/

6. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Dual Value Creation – Hybrid Spectrum
Source: http://www.4lenses.org/Setypology/se_in_context

7. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
The role of government and key non-state actors in social
entrepreneurship
Source: Bozhikin, I. et al. (2019)

8. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
How we can categorise business model for social
enterprise?
• The typology of social business models proposed by
Wolfgang Grassl (2012)
• 9 types of social business models
• It combines three important factors of the social business
model: mission, type of integration and target population
with the three traditional business categories (business,
non-profit and hybrid)
• Regardless of the type of business model, social
enterprises stand out with their mission, the need for
integration and the target population
Types of
SE
business
models

9. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
1. Entrepreneur Support Model
 The social entrepreneur “sells” business support services
directly to the entrepreneurs and helps the entrepreneurs
to build and improve their business
 Support may take the form of consultancy services, training,
microfinance or technical support
 These "customers" then sell their products and services on
the open market. Organizations that fall into this category
may include economic development organizations, business
development service organizations, and microfinancers
 Main source of income: sale of business services
http://www.4lenses.org/Setypology/se_in_context

10. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
2. Market Intermediary Model
 The social enterprise usually helps its clients - other
entrepreneurs - individuals, small producers or
cooperatives, by facilitating their access to markets by
providing targeted services
 Ex.: Marketing activities, product development, financial
loans and more. thus adding value to customers' products
 For example, an organization that helps small farmers
through marketing and sells their crops to them would fall
into this category.
 Main source of income: sale of services to the beneficiary

11. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
3. Employment Model
 The social enterprise provides opportunities for work and
training in order to acquire skills of its clients – beneficiaries
 Beneficiaries - usually are people who have barriers to
finding a job (homeless people, people with disabilities, etc.)
 In this way, the model allows to generate income from
employees, which pays the costs of the social entrepreneur,
which income can be used to provide services to those in
need. This model is adopted by many youth organizations
and organizations for people with disabilities
 Source of income: sales on the free marketplace

12. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
4. Fee-for-Service Model
 One of the most commonly adopted SE business models
 SE creates social services that it offers on the market. In this
way, it sells its social services directly to the beneficiary
client, an individual or group of persons, or to a third party
 In this way, the social enterprise receives income from the
sale of services to beneficiaries and is self-financing.
Additionally, net income can be used to subsidize other
social programs that need funding
 Many hospitals, schools, museums, utilities use the fee-for-
service model to a greater or less degree.

13. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
5. The Low-income Client Model
 Is a variation on the Fee-for-Service model
 The emphasis of this model is providing poor and low-income
clients access to products and services whereby price,
distribution, product features, etc. bar access for this market
 Examples of products and services may include: healthcare
(vaccinations, prescription drugs, eye surgery) and health and
hygiene products (iodize salt, soap, eyeglasses, earring aids,
sanitary napkins), utility services, (electricity, biomass, and
water), etc. for which they pay
 Main source of revenue: Sale of service beneficiaries at lower
prices.

14. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
6. Cooperative Model
 One of the most widely recognized SE categories
 The social enterprise provides collective services to the
cooperatives, generating benefits for them
 The services received by the beneficiary clients - related to market
information or soft services such as negotiation, achieving savings
from redemption, providing access to external markets for goods
and services produced by members of the cooperative
 The members of the cooperatives also generate income,
employment or create services
 This model has had its powerful development in recent years with
the development of the so-called platform economy
 Main sources of income: sale of services to cooperatives -
beneficiaries and membership fees

15. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
7. Market Linkage Model
 SE facilitates the representation of target groups in the
markets for example by providing training or loan
guarantees
 The model is similar to the intermediary model, but the
social enterprise does not offer / sell products and services
to its clients instead
 SE acts as a broker
 Many trade associations adopt the linkage market model.
 Main sources of income: sale of services,% of transactions
and membership fees.

16. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
8. Service Subsidization Model
 SE funds social programs (customers-beneficiaries) by selling products or
services in the marketplace
 Main feature of this social business model - sale products or services on
foreign markets and the use of the generated income to finance its social
programs
 Service subsidization is one of the most common SE models,
 The model is used mainly as a funding mechanism. For example, a law firm
may use the revenue generated from the firm’s regular law practice to fund a
social program that provides free law services to those in need. The firm may
run the program out of their own offices and may provide the free law
services themselves
 The main source of income is the sale of products on the open market

17. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
9. Organizational Support Model
 This type of SE, like a service subsidization organization, sells
products or services to the marketplace and then uses part
of the revenues to fund a social services organization
providing direct services to its own beneficiaries
 This model is usually external: business activities are
separated from social program
 This model of SE was created as a funding mechanism for
the organization and is often structured as an ancillary
business / subsidiary (non-profit or non-profit organization)
owned by a non-profit parent organization

18. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Complex Model
 A complex model of social enterprise combines two or
more operational models
 Complex models are flexible
 Models are combined to achieve desired impact and
revenue objectives
 Operational models are often combined as part of a
natural diversification and growth strategy as the social
enterprise matures.

19. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Mixed model
 Each unit within the mixed model may be related vis-à-vis
target population, social sector, mission, markets, or core
competencies and function in different sectors
 A museum for example, in addition to educational art
exhibits, might have both a for-profit catalogue business and
highly subsidized research and acquisition operation
 Like all social enterprises, mixed models come in a variety of
forms depending on the organization's age, sector, social
and financial objectives and opportunities. The diagram is
representative of complexity, not conformity of
organizational form.
 Mixed models are often a product of an organization’s
maturity and social enterprise experience

20. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
• Allows business model to be
simple, relevant and intuitively
understandable, while not
oversimplifying the complexities
of how enterprises function
(Osterwalder & Pigneur, 2010,
p.15).
PARTNERS DELIVERY CUSTUMER SEGMENTS
MACRO ECONOMIC
ENVIRONMENT
Who helps you to
deliver your activities?
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What activities do you
do? What
resources do you own?
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What difference are
you making?
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How do you work with
people who buy your
product/service? Who
are the people that
benefit?
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What are the economi, social
and technological changes
taking place that affect your
market now and in the
future?
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FINANCE
SURPLUS
Where do you intend
to reinvest this?
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REVENUE
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COST OF DELIVERY
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THE SOCIAL BUSINESS MODEL CANVAS
IMPLEMENTATION
SOCIAL VALUE
PROPOSITION
SALES MARKETING
What is your sales and marketing plan?
How do you reach your
customers?......................................................
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MARKET
What social impact
measures do you
mean?
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COMPETITORS
Who else plays in your space?
Why are you different
…………………………………………………………………………………………
…................................................................................
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...
Who helps you to What activities do you What difference are How do you work with What are the social, economic
PARTNERS DELIVERY CUSTUMER SEGMENTS
MACRO ECONOMIC
ENVIRONMENT
Who helps you to
deliver your activities?
……………………………………
……………………………………
……………………………………
……………………………………
……………………………………
……………………………………
…………………………………
What activities do you
do? What
resources do you own?
....................................
....................................
....................................
....................................
....................................
....................................
What difference are
you making?
…………………………………
………………………………..
…………………………………
…………………………………
…………………………………
…………………………………
…………………………………
How do you work with
people who buy your
product/service? Who
are the people that
benefit?
………………………………………
………………………………………
………………………………………
………………………………………
What are the economi, social
and technological changes
taking place that affect your
market now and in the
future?
………………………………………………
………………………………………………
………………………………………………
………………………………………………
FINANCE
SURPLUS
Where do you intend
to reinvest this?
…………………………………
…………………………………
REVENUE
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
COST OF DELIVERY
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
THE SOCIAL BUSINESS MODEL CANVAS
IMPLEMENTATION
SOCIAL VALUE
PROPOSITION
SALES MARKETING
What is your sales and marketing plan?
How do you reach your
customers?......................................................
.......................................................................
.......................................................................
.......................................................................
.......................................................................
.....................................
MARKET
What social impact
measures do you
mean?
................................
................................
................................
................................
................................
...................
COMPETITORS
Who else plays in your space?
Why are you different
…………………………………………………………………………………………
…................................................................................
...................................................................................
...................................................................................
...................................................................................
...
Who helps you to What activities do you What difference are How do you work with What are the social, economic

21. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
How to set up a social enterprise?
• Social enterprises have 2 main characteristics everywehere in the
world:
1. Primacy of the social purpose
2. Trading activity

22. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Stages in establishing a social enterprise
1. DREAMING
Building awareness of social
enterprise through workshops,
websites, and seminars.
Motivation
Self Assessment
Idea Generation
Idea Formation
2. EXPLORATION
Researching market for social
enterprise, testing feasibility,
developing business plan and
starting to raise the capital for
launch.
Feasibility
Business Planning
Pilot
3. START-UP
Revise business plan, build
enterprise and management
capacity, moving towards stability
and success in initial market.
Launch
Survival
Profitability
4. GROWTH
Expansion to new markets or new
products, additional equipment,
capabilities needed.
Plan Growth/Scale
Implement Growth/Scale
“By failing to prepare, you are preparing to
fail.”
Benjamin Franklin

23. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
How to write a business plan for a social
enterprise?
• Business planning will help any social enterprise (SE) or social purpose business (SPB) to:
• Attract investment
• Identify risks
• Measure social or environmental outcomes
• Demonstrate that you are using a business approach
• Showcase the management team
• Build alliances
• Check thinking
• Determine feasibility
• In a business plan, you must clearly articulate:
1. The mission of your social enterprise
2. The outline of specific actions to achieve your goals and objectives
3. Establish targets for planning, measuring and improving performance
4. Project the necessary resources, costs and revenues of your program

24. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
A working business plan for social enterprise
1. Executive Summary
2. Mission, Vison and Values
3. Business proposition – The problem and the opportunity
4. Your solution – 4.1. Beneficiaries or customers 4.2. Products and Services
5. Market Opportunity
6. Legal and regulatory frameworks
7. Operational Management
8. Ethical Choices
9. Social Impact
10. Team
11. Financial

25. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of
the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
Tips for successful start-up
• Make sure you have the right person at the helm
• Build the right team
• You will probably be running a business with limited resources
• Things change so you will need to conduct regular reviews.
• Bureaucracy needs to be kept to the minimum and good team communication is essential
• Build trust with all members of staff not just management
• Don’t take your eye off the ball as far as the market is concerned
• Marketing never stops
• Have patience
Creativity,
Sustainability,
Devotion