Before we dive into the 4 steps, allow me to provide some background. A Social Enterprise is a business with an objective to create social impact - which means to contribute to society in a positive way. The idea that a business should exist not just to make profit, but to also consider people and the planet, is not a new one. In the UK, before the welfare state existed, many schools and hospitals were set up as nonprofits to provide education or healthcare for the poor. Today, governments have officially recognized organizations that are neither charities or commercial businesses Thus allowing entities to exist that straddle both domains; usually in areas where low profit margins fail to attract commercial companies, or in physically hard to reach or dangerous locations.
A Social Enterprises can exist ‘for profit’ or ‘not for profit’. What both share in common is the aim to solve a specific problem for society. A ‘for profit’ Social Enterprise seeks to make a profit, but ploughs it back into the company, whereas a ‘not for profit’ exists for the sole purpose of meeting a specific social goal to improve society. Using the latter model, since profit is not the main goal, success is measured by the impact on beneficiaries or tackling those specific social issues.
I’m sure you’re probably eager to hear about those 4 steps I promised. So let’s dive in...
1 Identify the Social Problem
2 Research & Position Your Social Enterprise
3 Create Your Brand
4 Market your social enterprise
1. Identify the Social Problem
Before you start your Social Enterprise you need to identify the problem you want to solve, This must take into account the impact you hope to make, and which group(s) of people your Social Enterprise will assist.
A good tip is to write down your social objective, either through a Mission & Vision Statement or a Memorandum of Association. While this may sound a bit formal it, really does help, because you’ll have a written document that explains to all stakeholders how the Social Enterprise is different from other businesses - and the beneficiaries the company sets out to help. Additionally, you should clarify whether the organization is for profit or not for profit.
I’ve seen for myself the importance of specifying an organization's social objective. Shortly after founding a social enterprise, it became obvious that demand for our services outstripped supply. Thankfully we already had a clear social objective: to support single mothers, with children living at home under 18.
Having a well-defined mission also ensures your impact is easily measurable. How many people you help should be tracked and shared with stakeholders. Therefore clarifying who your beneficiaries are, and what makes them eligible, is vital. Moreover, it will also help you get support from governments and foundations. For example, some foundations only work with women or within education. Some government grant schemes are only for the elderly or those with disabilities, whereas some governments will not entertain religious organizations.
2 Research & Position your social enterprise
Whether you are a non-profit or for profit, your Social Enterprise needs to be self-sustaining. Therefore, just like any business, you need to do some research before launch. For instance, you have to find out if there are other charities, foundations and Social Enterprises already meeting the social issue you plan to tackle. If this is the case, then you might be wise to focus your attention on other areas, or on different types of beneficiaries not already covered. You may even want to consider a partnership with similar entities.
If research data is hard to find, check government statistics or organizations working in that area. When researching our Social Enterprise we used a report by the Lien Foundation for Social Innovation to identify the number of single households headed by women with low incomes.
Next, prepare a Feasibility Analysis on the long-term success prospects of your enterprise. This should address the organizational capacity and internal skills required to make the enterprise prosper. In addition, it will help you identify important trends in the category, from demand, to promotion and distribution methods required. The outcome is to prove the business model is practicable given the market variables.
Ensuring there is a demand for the service or product you aim to supply is especially important if you are launching a ‘for profit’ social enterprise. Just like any business, you’ll need clear evidence of ongoing demand and revenue to sustain the enterprise in the long run. And do bear in mind that even though Social Enterprises may have access to government grants or other financial support from charitable foundations, they are usually heavily reliant on members of the public - either through donations or purchasing goods.
If you plan to rely on donations, your social enterprise needs to compete with other entities (charities and social enterprises) for the public’s attention. If you sell a product or service, you compete with other commercial businesses for the same customers. Therefore, your social enterprise needs to be clearly positioned in your target customer’s mind.
A good example of a social enterprise that understands the needs of its consumer is The Nail Social in Singapore - a nail bar with a difference. Their purpose is to provide an income for Single women. It’s a mass-market service because they offer affordable manicure and pedicure packages, which most lower to upper middle-class women in Singapore can afford.
However, the Nail Social also seeks to delight their customers, offering pampering sessions with wine and a personal entertainment monitor (the kind you expect to see inflight) in a clean, modern well-designed environment. The Nail Social’s offer is significantly different from competitors, so much so that it can attract customers looking for a more affordable luxury experience to pay more for their manicure or become loyal to the brand.
Your market research should also cover the external environmental impact. This is known as a PEST analysis (Political, Economic, Social and Technological). For example, consider the “E”. When the economy is doing badly, potential donors are less likely to support your cause if you are exclusively focused on soliciting donations. However, if you offer them products or services below market rate during a downturn you may well get more interest.
3. Create your Brand
I’d need a separate article to cover all aspects of branding, but this overview will help you get started. You need to create a brand with a unique identity that is distinct from competitors. Crucially, your brand identity should be rooted in a single brand message that can be easily communicated to your stakeholders and target customers.
Avoid the temptation to rush off and find the nearest designer to create your logo. Because logos and other visual elements of your brand should only be developed after you have clearly articulated your company’s unique story.
Here’s how we went about developing our brand. From initial research, we discovered that most of our potential customers only had a vague idea what a social enterprise was and most certainly had no idea what a ‘marginalized’ woman was. As a result we simplified our brand message to ‘A Social Enterprise Helping Single Mums’ and created a tagline: ‘Feel Good Jewellery’ which is self-explanatory. We tested that brand message and found many women wanted to understand the impact of what we did. Therefore we adapted our brand message again to “40% of your purchase helps Single Mums look after their children.”
Only after we had established our brand message did we brief a graphic designer to create a logo. In addition to the brand message, we also shared our objectives, brand values and differentiation from other organizations. All of this information helped the designer create our logo, select the right fonts, develop a colour palette and consolidate all these design elements into the right “look and feel” for our social enterprise.
To give you another example of social enterprise branding, consider Tom’s shoes, created to donate a shoe to a child for every shoe purchased. The logo is easily recognizable blue and white with ‘Toms’ written in the middle - which is short for ‘Tomorrow's Shoes’. This logo is inspired by the Argentinian flag which reflects the story behind the founding of the brand by Blake Mycoskie. Whilst travelling in Argentina in 2006, he saw first hand the hardship many children faced without shoes. Inspiring him to create a for-profit social enterprise to supply shoes to children. The innovative idea has led to 100million pairs of shoes being donated.
4 Market your Social Enterprise
It’s vital that you market your social enterprise via the most appropriate media channels, so that you can reach your stakeholders in a cost-effective way.
For example creating a word-of-mouth campaign on social media can be a low-cost alternative to spending on advertising. Toms Shoes did just that; spurring customers to go one day without shoes and using the hashtag #withoutshoes. The last annual #withoutshoes in 2016 was so successful that over 27,000 shoes were donated in one day.
Of course there’s no guarantee that a word-of-mouth campaign will go viral, therefore you should also use Social Media to deliver a mixture of free content of value, as well as paid-for branded content. Facebook, Instagram and even LinkedIn can be used this way.
Don’t limit yourself to Social Media though. Think of all the media your potential target market reads, places they visit or online platforms they interact with on a daily basis and plan an advertising strategy based on how far your budget will stretch.
PR has a role to play too. You should aim to get free editorial coverage if you have something that is PR-worthy. But do cultivate relationships with the publications first. Or if you have a product, develop a giveaway competition - online editions of magazines can often be receptive to such collaborations.
Promotions that encourage a call to action or will move consumers towards taking a step to find out more about your social enterprise - such as visiting a store or website or making a purchase - are important and should be given priority. Your promotional strategy should fit your brand positioning and brand message. For example, consumers may become suspicious of a social enterprise that is always pushing discounts. That’s because people often support social brands for altruistic purposes, thus ‘hard sell’ discounts may jar with them. Instead, expertly-timed discounts linked with special events or festivals would be more appropriate.
Now that you understand the 4 key steps, I hope you’ll find them useful when you take the plunge and launch your Social Enterprise. If you need any advice or tips I’ll be happy to advise. Good luck!
hello@anisajohnny.com
