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How to Start a Social Enterprise: The definitive guide to starting an impact business (2017)

How to Start a Social Enterprise: The definitive guide to starting an impact business (2017)

Article · By Kerry Needs on May 22, 2017


If you want to start a social enterprise, then you will love this guide. 

When we were first starting out, we found that there was a lot of information; but it was scattered around the internet. It’s not easy starting a new business; and when you want to change the lives of others too, you need all the support you can get.

So we took it upon ourselves to create this - an ultimate social enterprise guide for social entrepreneurs. We hope you find it useful, and we welcome any feedback you have. Shoot us comments below.



The Guide in Full:


What is a social enterprise?

Let's dive into it.

It’s a cliche, but you really must be the change you wish to see in the world. Social enterprises are businesses that put their values at the heart of what they do. They focus on people as well as profit, and exist with a dual purpose; to benefit society or the environment as well as making money.


So as you can see from the video, social enterprises are at their core social; their aim is about improving society. Your idea could be a cafe that gives its profits to the homeless, or a charity that donates water to developing countries.

The UK is leading the way for social enterprise with over 70,000 social enterprises. This has led to lots of fantastic knowledge sources being created, such as Social Enterprise UK and Unltd.

It’s not just the UK, though. Social enterprises are slowly growing throughout the globe. In Australia, there are an estimated 20,000 social enterprises, and social enterprises are even shaking things up in India, America, The Middle East and Asia. It’s really a movement that is changing the way we do business.

Who are you helping, and why?

So you’re thinking of setting up your own social enterprise. Well done you!

Join the 100,000+ other social entrepreneurs around the globe who are hoping to change the world.  Social entrepreneurs are on the rise. It’s definitely a new way to do business, a more holistic way, based upon cooperation rather than competition.

Getting clear about your idea is the first and best thing to do. Albert Einstein once said ‘if you can’t explain something to a 6 year old, you don’t understand it yourself’.

The more you can define your idea, why you exist and who you’re aiming to help, the easier the rest of your business planning will be.

We love Simon Sinek’s idea of the  ‘golden circle’:

social enterprise guide

What resources do you have?

Before starting off, think about what you already have in relation to your idea.

For example, if you’re looking to make Fairtrade handcrafted toys for children, do you have knowledge of suppliers? How to buy and sell stock?

It’s easy to have a great idea, but a social enterprise also needs to deliver tangible results.

A great way of doing this is to make a list or a mind map of the problem you’re aiming to solve.

social enterprise infographic

Do you have any contacts that might be able to help you?

Make a list of family, friends, and social media connections that either have some knowledge of your intended sector or could introduce you to someone influential.

In the social enterprise sector, knowledge is power. Make sure you are fully knowledgeable about your business and how it will operate.

If you need to upskill, identify your knowledge gaps, and take classes on areas where you need help, such as accounting and bookkeeping, aor practising your networking and public speaking skills. If you need further help, speak to local organisations that can support you with an aspect of your business that you need help in.

social enterprise quote

Do your research

The best way to see if your idea has feasibility is to test, test, test.

Read up on your target market, do some focus groups, conduct surveys, and make sure you’ll actually be able to help people in the way you’re aiming to.

We’re big fans of Survey Monkey for testing the feasibility of an idea.

Another way to get validation for an idea is pitching contests. Contests or competitions can help you get buy-in for an idea by finding out the popularity of a particular product or service.

As your social enterprise will be focused on helping others, whether that’s the homeless, the disadvantaged or the environment, you’ll need to show how you create impact.

We’ve found that not many people even know what a social enterprise is. Ask your immediate circle what they think of your idea, and find out what local support there is for your business, too.

Here at Inventshift we found that it was difficult to find all of the information we need, so we created our own knowledge base, filled with all the answers to the questions we had when we were just starting out.

But most of all, we’ve realised that it’s important that you believe in your idea. Setting up a social enterprise is not always easy, and like with any business, it will have it’s own setbacks and challenges. Believe in yourself and you will go far.


Financing your social enterprise

When it comes to securing funding for your social enterprise, many people look towards family and friends or personal funds as their first port of call.

Bootstrapping your business is something that many social entrepreneurs do. Bootstrapping is essentially starting your business with your own limited capital. The benefits of this means that you don’t need to give shares to potential investors; you keep 100% of the business and can grow it in a lean way.

Beyond that, there are plenty of awards or grants you can apply for. A few of our favourites are The Big Lottery Fund, CAN Invest, and Community Foundations.

You can also apply for ethical angel investors to help you with your business. One of our favourite places for this is

Crowdfunding is another way you can raise capital. Use the power of a passionate crowd to build your business! We love this informative webinar from Unltd on crowdfunding.

Make sure you have enough capital to ‘weather the storms’ - every business has it’s financial ‘winter’, and it’s important you have enough cash reserves to keep you going throughout quiet periods.


Business plan

This is an area that many people feel daunted about - but please don’t be! It’s not that difficult when you get going.

Writing a business plan for your social enterprise is a way you can get investors to sit up and take notice of your new venture.  It will also help you clarify in your mind what steps to take. It should be no more than 20 pages maximum, and should help you clarify the following questions:


  • Your vision: How will society change from your business?

  • Your mission: What are you aiming to achieve?

  • Your goals: What are the aims of the business, and where do you see it in the future?


Your business plan shouldn’t be like a large 20 page report, but instead should be a clear and simple guide for yourself, or anyone else to understand your business aims and objectives.

Include your projections for the first three years of your business; aim to be realistic with both money earned and impact made. Your venture will hopefully be a long-term commitment, so think global, but act local!

There’s lots of online support that can help you write an awesome business plan that’s sure to knock potential investors socks off.


Deciding on your business structure

You may be surprised to know that you can’t register your business legally as a social enterprise, but by defining yourself as a social enterprise, it focuses your ambitions for the business.

Most social enterprises either start off as charities, non profits or small businesses. Your immediate and future funding and income generating opportunities will have a major impact on the structure you choose.


Social enterprise business models

You may have heard of one of the most famous social enterprises, Tom’s. Their ‘one for one’ approach is becoming a common way for social enterprises to do business, with every purchase helping someone in need. When you buy a pair of Tom’s shoes, one pair goes to a person in need.

There are also ‘pay it forward’ methods that are becoming popular; like the Canvas Cafe’s pop up restaurant events that allow you to have a meal, and also fund a meal for the homeless.

Finally, there are also models that contribute a certain element to a cause. This is the model we have adopted with the Inventshift Fund. We give 5% of all bookings towards the site to our fund, which is an impact resource designed to help charities and social enterprises in need.


Who’s onboard? Finding your team

Working with like-minded people can help if you’re a solo social entrepreneur.

Having just one extra person will allow you both to bounce ideas off each other, and help you feel less alone in this crazy journey. If you haven’t got that option;consider mentoring and being a part of an incubator if you feel you need more support.

Although you want to work with people with similar values, and aiming for the same vision, it’s important that your skillsets are different. Getting a rational thinker to work on your business when you’re a visionary may not be a bad idea! You’ll find that if you seek out people that are quite different to you, you’ll find a complementary set of strengths and weaknesses to your own.

If you’ve got passion and enthusiasm, that’s a great first step. Make a list of your strengths and weaknesses, and where you might need help in business. This will help you decide where you might need some extra help.

social enterprise picture

For example, one person in your team may focus on the big picture and the strategy, whilst the other takes charge of the organisational details and making it happen.

Additionally, you’ve got two aspects to your business - the financial or ‘business’ aspect, and the social enterprise side.

Surround yourself with social entrepreneurs (you can find a whole host of likeminded peeps on our site), and people that can give you ideas, and that you can bounce off other ideas. These may be very different from those who can provide you with business support.

The social entrepreneur community is thriving and strong; and one really great thing about it is that you’ll find that everyone is willing to help each other. There’s no competition between social entrepreneurs; our aim is the same!

Defining your product or service

So, now all of your background work is out the way, it’s time to get down to the details of your product or service. You may want to start with one or two income streams at first, to see how well they do before trying to do too much at once.

The next step is to think about these elements when creating the proposition for your social enterprise:

  • Product: What are you offering to the customer?

  • Price:  What do you need to charge to supply the product or service?

  • Place:  Where is the customer going to ‘shop’ for your product?

  • Promotion: How are you going to encourage customers to buy your products?

Many people perceive ethical or social good products as potentially expensive; but they don’t have to be.

Even though a large percentage of your customer base may buy from you because you’re creating positive change, that isn’t always the case. Focusing on the quality of your product or service will ensure you compete with other for-profit companies in your space, and take a bigger share of your target market.

Your product or service will generate your income, so ensure you’ve road tested it thoroughly to ensure you’ve got a viable business idea that can turn a profit.

Support and mentoring

So you’ve got your business up and running; but you need that little bit of extra help. A social impact accelerator and incubator could help you.

An accelerator is a growth program that helps enterprises when they are already established. An incubator is often used when in the early stages of a business; and will usually involve support or mentoring for much longer, to help your business get off the ground.

A great resource to help is the Social Enterprise Greenhouse.  This resource will give you access to a network of 400+ social enterprises and 300+ business and community leaders who contribute time, expertise, and money to support them to grow and achieve social and economic impact.

How to measure impact

If you’re set on becoming a social enterprise, you’ll have to measure your impact. This is a crucial stage for any social enterprise, as you’re demonstrating the value and benefit of your business to those outside of it, possibly potential investors.

You want to make a difference to your local community; or possibly even the world? We’re with you.


When it comes to measuring impact, make a note of how every action your business takes will link through to your social impact goals. For example, distributing 25 mosquito nets does not necessarily mean that will be a reduction of instances of malaria; the malaria nets may never be used. It’s easy to assume you’re making a difference, but are you really?

To make sure you’re having a real impact, it’s important to focus on your outcomes, not your outputs. Read our article for more tips on how to measure SROI (social return on investment).

Did you know that you can also get your measurement recognised?  To raise the profile and status of your organisation, you can apply to have your social enterprise accredited using the Social Enterprise Mark, provided it meets certain measurement standards. The School for Social Entrepreneurs also runs courses on measuring your social impact.

If you’re based in the UK, you can also join the Organisation of Responsible Businesses.

What lifestyle do you want?

Depending on the nature of your business, you may need to purchase retail space or office space.

If it’s the latter, consider keeping your overheads low by working remotely, or alternatives to a traditional office, such as coworking

Here at Inventshift, our team works remotely and we love it! We use tools such as Slack, Google Drive, Dropbox and Trello to communicate on projects.

Becoming a social entrepreneur helps you think about your business in an ethical way, and allows you to start to minimise time and not waste resources. Choosing a location independent team may be the right move for you, or it could be setting core business hours where you tackle orders and shipping of your goods.

Becoming a social entrepreneur is also about making your life work for you. If you aren’t healthy, your business won’t be either.  What kind of lifestyle do you want to create? Think about how you can blend your passion for your product or service around the type of life you’d like to lead. We’re big fans of lifestyle design (have you read the 4 hour work week?) and creating a life that you’re excited about.


Creating opportunities

Once you’re up and running, it’s time to start getting the word out there. One of the most cost-effective ways you can do this is through networking. And forget the boring ‘swopping business card’ type events. This can be anything, from going for a coffee to doing a talk at your local Toastmasters or Rotary Club.

We’ve found a great way to join with other likeminded social entrepreneurs is to join #ethicalhour every Monday 8pm BST/GMT!

Creating opportunities in our opinion comes from having the right mindset. If you’re happy, positive and enthusiastic about the changes you want to make in the world, you’ll find that connecting with others is easy.

The more people you get in front of, the more opportunities you will create. It’s that simple!

Have you got an ‘elevator pitch’? That’s essentially how you would communicate your business if you were in an elevator or lift. It should last a maximum of 30 seconds, and should tell your prospective customer all they need to know about you and your business.

Online marketing

We could easily write another separate guide to online marketing; but whether you’ve got physical products or an online marketplace, selling yourself well online is vital.

It’s crucial to make sure that you have a strong brand, and that this is executed well throughout everything you do online. It’s not just about the logo and the typeface on your website; it’s about making sure that you demonstrate a particular style and tone of voice that is consistent throughout all your channels and activity.

To get the right eyes on your business, SEO is also vitally important when you’re setting up your site. It’s no secret that link building is one of the best ways to boost SEO, and attract traffic naturally and organically.

Also, make sure you choose the right keywords that are relevant to your target market and service or product offering.  

Once you have the keywords, these form the building blocks of your business, and you can use them in your articles, your social media content, and anything else you do online.

Getting PR

Getting the right PR can be fantastic for your business. Fortunately, there is more media interest for social enterprises worldwide, so if you tell your story in the right way, you may secure some local or even national press attention.

PR doesn’t have to be expensive; there are many different and cost-effective ways to get publicity for your startup. There are plenty of helpful tips we’ve found, like searching for #journorequest or #prrequest in Twitter, that are quick to do and could make all the difference to boosting your site rankings.

When coming up with a press release, ask yourself the following questions:

1. Is there anything "new" in my story?

2. Is there anything unusual or unexpected about it?

3. Would this be of interest to anyone outside my business?

4. Will anyone actually care?


Write as if you were talking to a friend, not a journalist. But at the same time, consider the journalist’s point of view. The launch of your business may not be newsworthy material; but something else about your business might be. In the email headline, use the words ‘STORY IDEA:’ and then your angle, to highlight your prospective story and get attention from the journalists.

Contact alternative media sources such as Positive News and Conscious Magazine to further ramp up your PR efforts.

When you get PR; it doesn’t stop there. Make sure you get a ‘As featured in’ banner to your website, along with the logos of the publications you’ve been featured in. Retweet and share your coverage; and mention that you’d like others to read, too.

Making your business futureproof

When it comes to building your business for the future, we’ve found that one positive approach to a social enterprise is to adopt the lean method; that is, closely monitoring what is working every step of the way, and constantly refining the business as it takes shape. You don’t just ‘startup’ and start earning; you’re constantly in the process of refining your proposition and your offerings, learning from your target market and adapting your messaging to suit.

lean startup.JPG

Advice from other social entrepreneurs

Here at Inventshift, we’re fortunate to have interviewed social entrepreneurs from all over the world. We’ve gained some excellent advice from the likes of Project Rockit, Good Will Wine and Fighting Chance, as well as lots of others!

Hannah Parris, founder of Mighty Good Undies, gives her most valuable tip:

‘I probably have three pieces of advice. It is quite a rollercoaster and on top of all that you got a lot of boring stuff to do. There’s lots of boring elements in running a business. Accounting is not fun, and managing your receipts or dealing with purchase orders, all that sort of stuff that is pretty boring unless you are in love with the why you are going to get really sick of it. The next thing is have a really good team around you, build a great team that have shared values and shared why. That was a big lesson for me. You really can’t be doing it all by yourself, it’s too hard and take too long as well. So, have a good team with complementary skills but all with a shared vision of what you are trying to achieve. The last one is, make sure you can pay all your bills. There is no shame in saying I have got rent to pay, or a food bill because you need to be able to support yourself.’

Case studies: Successful social enterprises

Social enterprises have been successful all around the world and are continuing to grow.

An example of a social enterprise in India is Seva Cafe in Mumbai, where there are no prices on the restaurant menu. Each meal is funded by a ‘pay it forward’ scheme. Their note on your ‘bill’ reads: "Your meal was a gift from someone who came before you. To keep the chain of gifts alive, we invite you to pay it forward for those dine after you."

Clean Bites is a social enterprise in Malaysia that is doing really well. Most Malaysian food is greasy, oily and unhealthy, so Clean Bites established itself as an organisation that encourages the Malay people to make healthier food choices, by offering them fresh, sustainable and tasty meals.

We offer a list of social enterprises on Inventshift - check out our directory with over 3,000 social enterprises!

Overview: Final notes

So that rounds up all of our helpful tips; but we’d like to leave you with one thing - you’re not alone on this journey. All over the world, there are thousands of people like you searching for the right information on social enterprises, following their hearts and creating businesses with real positive impact.

Creating a community of social entrepreneurs is our ultimate aim, so we’d love to hear about your story, and the opportunities and challenges you face.

We set up Inventshift primarily to help those people, so if you’re still in need of ideas or resources, then please get in touch. We’ve got plenty of experience!

Iranthi and Jarkko x

Article by:

Kerry Needs
on May 22, 2017