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Want your social enterprise to make an impact? Here's where to start.

Thoughts on building a robust business foundation from All Good Ventures’ Founder, Rod Claycomb .

I’ve been involved in start-ups pretty much all of my career. I get excited about new ideas, new beginnings and new opportunities. So, it’s probably not a big surprise to anyone that Heather’s and my charity was set up to offer support to social enterprises that are just getting started.

In fact, many of our funded projects are just an idea with very little substance behind them. Yet! One thing they do have in common - all of them - is a passion for helping to save people from a state of deprivation. Poor healthcare. Poor economic circumstances. Poor educational opportunities. Disadvantaged career opportunities. Slavery. Addiction. The list goes on… and on and on. This is the type of passion that we want to support. People helping people. 

BUT, it’s also this kind of passion that can make you look past the immediate problem, which is getting the social enterprise sustainable financially BEFORE you can be a strong position to actually help those you are passionate about, and to do it for a long time in a sustainable way.

There are three issues at play here:

  1. Passion trumps everything – The main reason people want to start a social enterprise is to help someone.  Many social entrepreneurs are ‘people’ people, not business people. You can get passionate about saving the world. But developing a business strategy, building a budget and writing an execution plan often aren’t high your list!
  2. Social funding is plentiful – But social funding is not sustainable!  If you spend the bulk of your time writing funding applications, you actually won’t have any time to build your enterprise. Those larger lump sums coming in at one time, coupled with the thrill of writing a successful grant application is immediately countered by seeing the bank balance starting to decrease again. You begin the slow build to writing the next one, and on it goes.
  3. All anyone talks about is impact! – From the day someone starts (or even is thinking about starting) a social enterprise, you seem to get flooded with the impact measurement narrative. So much so that you’re thinking about the impact you’re going to make before you’re even in the driver’s seat. So, understandably, when you’re a few months into it and you’ve told everyone about all this impact and you’ve been excited about all this impact, you immediately start to see how little impact you’ve made and/or you suddenly realise how long it’s going to take to make an impact.

So, what’s the solution? Well, it’s simple and it’s hard. The simple thing is to realise that, no matter how long it’s going to take, your passion is still going to be there. The purpose for which the social enterprise is being set up is likely very enduring. The hard thing is to realise that you need to get your social enterprise strategically and financially sound before you can actually start making the impact.

First things first, pace yourself: I think the easiest way to approach this is to give yourself the gift of time. Why not say to yourself: I’m going to start this business; I’m going to take two years to build it into a money-making, profit generating engine; and, from year three, I’m going to start using the profit to make an impact.

Now it’s time to focus on the following three tasks:

  1. Get yourself a good strategy guide (I’ve found Verne Harnish’s Scaling Up book to be an amazing and easy-to-use tool). 
  2. Develop a quarterly set of actions that can deliver on your strategy. 
  3. And, above all, focus on financial stability as quickly as you can. Don’t ignore those social funding sources… they can be a huge advantage when you’re getting started. But don’t set yourself up to perpetually rely on them. Social entrepreneurship does not have to become social welfare!

The key takeaway? Build a good business foundation first and the rest will follow!



 

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