Is Social Enterprise right for you?
Is a Social Enterprise the most appropriate structure for your project?
Setting up your project or organisation as a Social Enterprise may be the right thing for you if:
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you want to be socially owned
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you have the ability to follow market trends and are able to change your products or services to suit
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you and your team feel comfortable with the joint responsibility of being directors of the enterprise (paid or unpaid)
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you have the freedom to manage and organise your finances to suit your developing needs
If the above apply to you then becoming a Social Enterprise may be an opportunity worth considering.
The advantages are that it will provide a formal recognised structure for your enterprise; it will give you the flexibility and freedom of being able to trade commercially whilst still fulfilling social aims, and therefore still being an attractive investment for grant awarding bodies.
The disadvantages are that it will introduce certain controls and restrictions as defined by its constitution, and that it will be expected to operate commercially, generating a proportion of its income from trading.
If, on the other hand, you are quite clear about your aims and objectives and do not wish to alter them any way, you and your team are fully committed to your cause and are happy to support the project as unpaid voluntary Trustees, then perhaps charitable status may be an option. To operate as a charity you would need to survive on fundraising and grants. Charities have less freedom to change due to the strict controls on them by the Charities Commission, but there are advantages such as preferential local and national taxes. Established charities can also set up Trading Arms, which can be social enterprises that can donate any surpluses back to the charity as a gift.
Alternatively, you may be a voluntary or community constituted group which is running successfully and is able to sustain itself in achieving its main purposes. If there is no wish to branch out or change the group’s aims, and the group is well structured and adequately protected from a legal point of view, you would question whether there are any benefits in becoming a social enterprise. Unless you had expansion plans for the future, or were looking to trade in a different way to improve your long term sustainability, your answer to this question would probably be 'no'.
If your aim is to profit personally from the enterprise, then becoming a social enterprise is not the option for you as they are strictly ‘not for personal profit’.
If you think that becoming a Social Enterprise may be the right move for your group, read the other sections on starting up.
