Mei Hui Business Research Manager Social Enterprise London March 2011

1. Developing Enterprise An introduction to social enterprise Mei Hui Business Research Manager Social Enterprise London March 2011

2. Introduction • Overview of social enterprise • What it means to be entrepreneurial • Why use the social enterprise model? • Available support and funding Common Characteristics

3. Social Enterprise London • SEL provides a broad range of support to third sector organisations interested in social enterprise: • Membership of the London Social Enterprise Network • The key lobbying voice to London’s policy makers & commissioners • Specialist business support and training, including one to one sessions, open surgeries and networking, procurement and Future Jobs Fund • Updates on finance, events, news, jobs, training etc. • Bespoke consultancy support

4. Social Enterprise Definitions A concept not an entity “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” (UK Government Department for Trade and Industry - 2002)

5. Common Characteristics SOCIAL AIMS SOCIAL OWNERSHIP ENTERPRISE ORIENTATION

6. Social enterprise in London • Approx 3,400 social enterprises in London • Majority are SMEs with <10 employees, and turnover <£0.5m • Social enterprise provides over 100,000 jobs, with a combined turnover of £4bn

7. Examples of organisational types in the UK • Development trust • Co-operative • Credit union • Social Firm • Intermediate Labour Market • Trading arm of charities

8. Core Arts www.corearts.co.uk

9. Case study: Magic Breakfast • A social enterprise providing healthy, free breakfasts for children in deprived primary schools across London . • Commercial links form key part of the model. • Currently PepsiCo (the company that produces Quaker oats and Tropicana orange juice) and The Bagel Company both supply food at minimal cost. • Corporate sector benefits through positive PR, social enterprise benefits through reduced costs. • www.magicbreakfast.com

10. Elvis & Kresse Elvis & Kresse creates stunning life-style accessories by re-engineering seemingly useless wastes. The innovative and pioneering Fire-Hose range is made exclusively from genuine de-commissioned British fire brigade hoses which, after a distinguished career fighting fires and saving lives, were otherwise destined for landfill.50% of profits from the fire-hose line are donated to the Fire Fighters Charity.

11. Who are your stakeholders? Mission driven organisations often have a broad range of stakeholders from beneficiaries to funders, from families to government officials. You have a responsibility to deliver what is important to them

12. Investors Private sector partners Donors Suppliers Other public sector bodies Local community Purchasers Social economy sector partners Founders Service users Volunteers Local government Employees Stakeholders Members Beneficiaries

13. Stakeholder Analysis Proximity to organisation Beneficiary Staff Ability to influence Funders Press Public

14. Definition of a social entrepreneur “A social entrepreneur is someone who works in an entrepreneurial manner, but for public or social benefit, rather than to make money. Social entrepreneurs may work in ethical businesses, governmental or public bodies, quangos, or the voluntary and community sector”. School for Social Entrepreneurs, UK

15. Reasons for a VCS organisation to look at social enterprise • Grant funding under increasing pressure • Need to demonstrate aim of being ‘sustainable’ • Offers new ways of achieving positive social and environmental outcomes, and involving the community • Independence

16. Which legal structure should we choose? • An appropriate legal format should: • Protects the social purpose and objectives of the organisation • Allow it to conduct its chosen trading activities • Be capable of attracting the necessary investment and management talent • Protect the stakeholders from undue risk • Be effective, efficient and economical

17. Legal structures • Four main forms of incorporated body: • Companies – registered under the Companies Acts 1985 and 1989. This includes a new form of company called a Community Interest Company (CIC) which is being promoted as the new legal form for social enterprises . Other forms include company limited by guarantee (where liability is limited to typically £1) and company limited by shares (often used by private sector, good as a trading arm model) • Industrial and provident societies (IPS) – registered under the Industrial and Provident Societies Acts 1965-2002. To qualify for registration a body must be either a “bone fide co-operative” or a “society for the benefit of the community”, also known as a “bencom” • Limited liability partnerships – registered under the Limited Liability Partnerships Act 2000. No requirement to have a governing document. Very few examples of social enterprises using this legal form

18. Financial resources • What do you want the finance for? • Working capital – cashflow requirements, especially when experiencing rapid growth • Physical assets – land, buildings, machinery, equipment etc • Source of information • http://www.sel.org.uk/funding-and-finance.aspx • http://www.fundingcentral.org.uk/Default.aspx

19. SEL partnerships - SETLL • SETLL is a pan London programme delivering support to individuals and organisations interested in SE. • The support includes online toolkits, one to one sessions and workshops in areas such as financial management, asset development and social entrepreneurship • School for Social Entrepreneurs (SSE) is a key partner providing a one year “MBE” style programme to entrepreneurs providing peer mentoring support to develop leadership skills.

20. Business advice

21. Help and support • Social Enterprise Coalition www.socialenterprise.org.uk • Co-operatives www.cooperatives-uk.coop • Social Firms www.socialfirms.co.uk • Cabinet Office http://www.cabinetoffice.gov.uk • Business in the Community www.bitc.org.uk • Social Enterprise London www.sel.org.uk