A few simple basics
There are a number of ideas I find myself returning to over and over again in my work with SEF’s clients – a few simple basics that may help in your thinking about working in the world of social enterprise.
- Income must be bigger than outgo, or you don’t get to play. No matter what kind of organization you are involved with, your revenue stream has to be greater than your expenses. Period. No way around it.
- At its simplest, the difference between non-profit and for profit corporate structures is not about whether you earn more revenue than expenses, it is about what you do with the profit. If you decide to invest your profit back into the business (rather than paying shareholder dividends) and declare yourself a ‘non-profit’, governments will forgive various corporate taxes. But it should not change your approach to the balance between revenues and expenses. (See the simple basic above.)
- Corporate structure doesn’t matter. It just needs to be rightfor how yourenterprise is going to work – not just now, but preferably years from now too. The structure needs to work for your customers, your stakeholders, your operational and management approach and ultimately, your desired outcomes. Your structure alone does not make you a social enterprise. It is whether you have a mission at your core that defines you.
- Try thinking of ‘social enterprise’ not as a noun, but as a verb. It is a way of doing things, adopting business tools and tactics to deliver good to the community.
- Government grants are not gifts. They are earned revenue. Government is one way that we as citizens join together to get things done on behalf of the whole community. It is what we do on behalf of us. So if a government has provided your organization with a grant, they are engaging you to provide a service to the community. Try thinking of government as your customer. So if you have ‘lost’ a government grant, perhaps it is time to examine why they did not ‘purchase’ your goods or service. What do you have to do next time to get them to purchase your service rather than another on offer?
A lot of these points come down to semantics, but hopefully they can provoke you to think about what you do in different ways. And that may be key to a whole new way of successfully accomplishing your mission.