Social Enterprise Derby and Derbyshire

Becoming a Social Enterprise

In the following sections on getting started with Social Enterprise you will be asked a number of questions to help you think through your plans. If you have difficulty answering any of the questions follow the links to find out more in the appropriate section of the A-Z or in the support menu.

Building Your Foundation

So let us assume you have found people who are interested and enthusiastic about your idea. Does everyone in your group have a clear understanding of your business idea? Do they fully understand the responsibilities of running a social enterprise e.g. becoming a director, managing a business, employing staff and managing finances? Have you identified how much time people can commit and are you aware of the skills each person can bring that will benefit your idea?

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Research

How much research has been done? Have you considered potential challenges that you may have to manage e.g. licences, relevant certificates, suitable premises and start up costs? What research have you undertaken to identify the need for your product or service? Can you prove there is a need? If your organisation will be based locally have you consulted the local communities?

Perhaps now is the time to embark on a feasibility study, which should be undertaken to provide an overview of the primary issues related to a business idea. The purpose of a feasibility study is to identify any 'make or break' issues that would prevent your plan from succeeding.

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Business Planning

If everything is in order then you can start writing your business plan. Business plans are needed to structure your idea and give you a clearer picture of the costs and the market. It can be used to focus on the vision and values, keep track of objectives and goals, and monitor the enterprise’s progress.

Funders and banks will expect to see a business plan, if you are considering applying for funding. Help with business planning is available from a variety of support organisations either by a dedicated business advisor or from relevant training.

Questions you should be asking at this stage are: What are the objectives of the enterprise? How will we organise to achieve those objectives? How will we market and sell our products and services? How will we measure performance? What are our financial projections?

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Marketing

One of the most effective ways for a social enterprise to sustain itself is to have an effective marketing plan. The main aims of a marketing plan are:

Attracting more customers
Increasing your sales
Keeping customers
Making your customers buy more from you

Your marketing plan should include:

Defining your market
Identifying your market
Understanding your customers’ needs
Promotion/advertising
Monitoring and reviewing progress

The marketing plan does not have to be a large document or complicated just a way of planning and monitoring your future sales. At this stage ask yourself: Do I know who my customers will be? Am I clear on what I will be selling to them and the price I will charge? How will I deliver the products and services to them? How will I promote the service?

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The Enterprise Plan

Becoming established Have you decided on the type of legal structure that you wish to adopt? Have you looked at the difference between the options available o Industrial and provident Society (IPS) (Co-operative)

Industrial and Provident Society (For the benefit of the community)
Company Limited by Guarantee
Company Limited by Shares
Community Interest Companies (CIC’S)?

Have you chosen a business name and confirmed with Companies House that it’s available? Have you registered your web site address, if you have one?

Have you written your Memorandum of Articles of Association? Do you have a bank account in the new name? Do you have the advice of an accountant and a solicitor if you need them?

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Start Up Costs

Do you know how much the start-up is going to cost in time and money (e.g. the cost of doing a feasibility study, a business plan, and legal costs? Will you need funding? From where will you obtain this? Will it be in the form of grants or loans?

Funding bodies and their criteria for awarding grants change all of the time. The Funding Menu, provides details of free funding websites and other organisations that can help. The Support Menu provides details of support agencies who can also assist with financial guidance.

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Management and Structure

Have you thought how Stakeholders may help in your development? They can contribute in many ways by offering specialist support, time, guidance funding and much more. Have you considered the roles that may be played by the following types of stakeholder?

Members of the community (local or otherwise)
Workers (volunteers or employees)
Direct customers
Suppliers of goods and services
Finance or capital providers/investors
Advisors
Partners
Regulators

Who is going to manage your enterprise? It needs to be made quite clear at the beginning who will be running the business and what positions both the board, and any staff will be undertaking. Unless there is a structured plan of the general running of the business, it is unlikely to thrive. Financial planning will be necessary, to take care of both short and long term finance issues.

Do you have an operational plan which will describe how the day to day work and finances will be organised, and how to enhance your products and services?

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Forward Planning and Measuring Progress

The creation of wealth and opportunity for community benefit can only be achieved through sound commercial practices. Social enterprises are businesses that need to be operated as such to be sustainable. Don’t file your business plan or marketing plan and not use it again. Keep looking at it, to see if you are on track. If not, have things changed within the business - do you need to alter the plan?

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Social Auditing

In your organisation’s portfolio, have you included how you are going to measure your social impact through ‘Social Auditing’? This is a framework which allows a project to account for its social, environmental and ethical input into the organisation and community.

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