Social enterprises are independent businesses, autonomous of state/government control. They are owned and controlled in the interests of the organisations social/environmental mission. Social enterprises should earn at least 50% of their income through trading, rather than through grants or other funding.
A social enterprise is an organisation that exists with a clear goal to help the community but runs the organisation like a business. All profits are reinvested back into the organisation.
While the traditional entrepreneur aims to create a product, service or process for which a consumer will pay, the social entrepreneur aims to create a product, service or process from which society will benefit.
Types of social enterprise
- Credit union. Definition: Finance co-operative that helps people save and borrow money. …
- Community-based organisation. …
- Non-Governmental Organisations with commercial arms. …
- Social firm. …
- Cooperative. …
- Fairtrade. …
Social enterprises are defined in many ways, but typically are nonprofit organizations that operate businesses in order to generate revenues and fulfill their missions. The concept has become increasingly common in the past three decades as a result of a combination of government funding cuts to social programs.
The more profitable a social enterprise is, the more it can invest in activities and resources that create social benefit. But on a more vital level, being a profitable business means a social enterprise is helping ensure it can continue to exist and fulfil its social purposes in the long term.
Social enterprises are in our communities and on our high streets, from coffee shops and cinemas, to pubs and leisure centres, banks and bus companies. By selling goods and services in the open market, social enterprises create employment and reinvest their profits back into their business or the local community.
A social enterprise is a business that has a social purpose, and reinvest its surpluses to support the achievement of its social purpose. The key thing in this definition is “business” – so a social enterprise is expected to trade/sell products or services like any other business – and that is how it makes money.
It is a common misconception that Social Enterprises are exempt from tax. For HMRC, social enterprises are treated the same as limited companies for tax purposes. On a positive note, there are some reliefs available to social enterprises and charities.
Social business is an umbrella term used to describe an organization that includes social media as part of its business plan.
Certification demonstrates that a Social Enterprise exists to create impact through trade by doing three things: Having a defined primary social, cultural or environmental purpose consistent with a public or community benefit. Deriving a substantial portion of their income from trade.
Entrepreneurs tend to be classified as those who take on high-growth, high-risk innovations while small business owners oversee an established business with an established product and customer base.
Social Business is a small subset of Social Entrepreneurship. In order to distinguish the two types of entrepreneurs we call an entrepreneur engaged in social business as a” social business entrepreneur”, rather than a “social entrepreneur”.