Doug Richard's School for Startups » Social Enterprise

Social Enterprises Get Some Help Getting Started from UnLtd and School for Startups

Doug Richard — Thu, 15 Apr 2010 11:51:45 +0000

by Doug Richard

Anyone who has attended my events or read my articles knows my aversion to entrepreneurs seeking outside funding for a project before its generating revenue on its own. That even applies to social enterprises that have “good works” as well as good business in mind when they begin. A social enterprise is not a charity . . .

That said, I’m very cognizant that many new business owners can’t turn even to family and friends these days to help defray expenses like a computer, photocopying or basic travel expenses. I also understand how hard it is for new businesses to connect to the mentors and incubators that can help them launch correctly and well with support from peers.

That is why School for Startups has teamed up with UnLtd, the Foundation for Social Entrepreneurs, to make competitive Catalyst awards for up to £5,000 available to entrepreneurs pitching at School for Startups “Start Here! Starting & Growing a Successful Business” events across the UK. These awards to individuals are designed to help them grow an entrepreneurial idea into a self-sustaining enterprise that creates positive social change.

To see if you are eligible to apply for a Catalyst award, please click here.

To apply, please click here and complete the online application form. Please quote as a reference on the field ‘Project Name’ S4S/[ event you are attending] i.e. Leicester/London/Brighton/Cambridge along with the name of the project if you have one.

For more information about this program and others than can help out new entrepreneurs, check out our Funding for Startups page.

UnLtd and School for Startups financial awards come with additional support and mentoring designed to help social enterprises get off to the best possible start.

Practical help from experienced entrepreneurs delivered at exactly the right time can help a new social enterprise get off to the best possible start. Real help, rather than expensive loans or investment with long strings attached, is hard to find. School for Startups is glad to be part of a program that provides practical assistance to the nascent superheros we call social entrepreneurs.

Having Trouble Starting Your Social Enterprise? Here’s Where to Get Good Help Fast . . .

Nancy Fulton Mazur — Sun, 07 Feb 2010 23:59:56 +0000

Social entrepreneurs develop sustainable solutions to social problems that the market hasn’t come up with yet. Whether it is delivering clean water to the one billion people on earth who don’t have it through children’s playgrounds or making London coffee purchases support ethical coffee plantations in Central America, social entrepreneurs build business models that help local and global communities.

But who helps social entrepreneurs create those solutions?

You can find links and descriptions for more than 50 organizations that guide and support social entrepreneurs on the VentureNavigator website. Look here to find links to organizations like:

Social Enterprise Coalition
Look here for advice about the best practices for Social Enterprises and links to some useful financial resources. This organization is the UK’s national body for social enterprise.

UnLtd
UnLtd is a charity that delivers financial support and advanced training to social enterprises in the UK.

Community Action Network
Social entrepreneurs can acquire the office space and other infrastructure they need to start their businesses through CAN.

Unity Trust Bank
Unity delivers specialist banking services for social enterprises.

Bridges Social Entrepreneur Fund
This organization provides funding solutions to social enterprises across the UK.

In addition to a catalog of Social Enterprise focused organizations, VentureNavigator also provides a series of assessments to help you identify where you, or your business, may be falling short. These diagnostics tools can help you determine:

Whether your business is viable.
When your business is ready for investment.
What management and leadership skills you require in order to run your business well.
What kind of legal structure best meets the needs of your social enterprise.

These assessments take just minutes to complete and they direct you, quickly, to the information and resources you need to resolve problems and remove road blocks.

Choosing a Social Enterprise Legal Structure: CLS, CLG, CIC or Cooperative

Nancy Fulton Mazur — Fri, 05 Feb 2010 17:45:26 +0000

January is a time for new resolutions. At School for Startups we began the year with an emphasis on Social Enterprise. We kicked off that emphasis with a big bootcamp on how to start and grow a social enterprise on January 19th at the Royal Institution. And though we covered alot of ground, we left a lot of detail behind. Our partners, at www.venturenavigator.co.uk/socialenterprise created a series of online resources to help people who are starting or running a social enterprise. Over the next few days we thought it might be useful to do a bit more ourselves and lead you to their resources.

One of the great things about the Venture Navigator site, besides being free, is that they have created tools, called Assessments that let you figure out complex issues. One of them is figuring out what sort of Social Enterprise you should have. Though I outline some basic principles below, I recommend that you take the assessment to determine, based on your own preferences and requirements, which legal structure will likely work best.

Generally speaking, a social enterprise is a business designed to create a sustainable solution that meets a social objective. Some social enterprises take all the profit generated from their business activities and pour it back into the business in order to scale the operation up. Some social enterprises solicit outside investment, donations or grants and use that funding to create a new product or service that meets a social need. Subsequently the social enterprise sells the solution over and over again just as a normal business would. Still other social enterprises are businesses owned and operated by charities in order to fund their operations.

The kind of legal structure you use to create your social enterprise has everything to do with your objectives.

You can be a sole trader. You make all the decisions. You take all the risk. If your business gets sued, you personally pay the price. This is not usually thought to be a good structure for a business of any appreciable size, but many small business owners do operate as sole traders. A social entrepreneur can do so as well.
You can be a limited company, which means that the amount you have at risk for loss in your business is something less than everything you own. Limited companies often have multiple owners who share in the decision making based upon rules outlined in their constitution. Limited companies come in a couple of forms
- Company Limited by Share (CLS) enterprises use share ownership to determine decision making within the business. Share ownership also limits risk. In general an owner can only lose the amount represented by the number of shares he owns.
- Company Limited by Guarantee (CLG) enterprises use members to determine decision making. So members put up a nominal amount to become an owner of the business. Decisions are taken by vote.
You can be a Community Investment Company (CIC) which is a CLG or a CLS that has special clauses in its constitution which guarantee that the assets of the business will not be used to make a profit for the owners. Usually CIC businesses are Companies Limited by Guarantee. A CIC is often used to create a “trading arm” for a non-profit or charity that needs to buy and sell in order to generate revenue.
You can start a Cooperative, which is a group of equal members from a community that come together in order to achieve a common objective. For example, a group of artists may form a cooperative in order to undertake marketing operations. Members of a community may form a cooperative in order to sell products and services in order to fund arts education in a local school through trade.

Generally speaking, most social enterprises are Companies Limited by Guarantee or Companies Limited by Share. CLG companies are thought to be preferable, in some cases, because the money a partner has invested in the enterprise does not determine how much control they have over the business. Generally CLG companies are organized to give all members a single vote and decisions are made by majority. CLS companies are thought to be somewhat better for investment purposes because philanthropic investors can purchase ownership and control of the business by buying shares. Most investors find this important. Many social enterprises elect to become Community Interest Companies as well. A CIC has a constitution with very strict rules on how investment and assets will be managed.

All of these legal structures are suitable for social enterprises. Which you choose has to do with what kind of operations you plan to undertake, how you want decisions to be made and how your business will be funded. For more help and guidance on which structure will work best for you, we recommend using the assessment designed to help Social Entrepreneurs select a Business Model at VentureNavigator.co.uk.

Growing a Successful Social Enterprise

Mark Boyd — Wed, 20 Jan 2010 18:17:55 +0000

Doug Richard with Uday Thakkar of Red Ochre

At around midday yesterday, the School for Startups team welcomed a packed audience of entrepreneurs who had traveled from all around the UK, to pass through the historic doors of the Royal Institution, for a precious seat in its sold out auditorium in London. Our first event this year, Growing a Successful Social Enterprise was an open panel exploration of the issues and burning questions arising from this relatively new and often misinterpreted business classification.

Delivering our curriculum in his trademark charismatic and direct style, Doug gave his run down of the core principles behind starting a social enterprise. One of the take home points of this discussion was that the distinction between a social enterprise and an enterprise in its most commonly understood form is largely blurred. Hence, collectively we can refer to social enterprises as simply enterprises, for business analysis purposes and treat them as such when applying our core considerations.

These considerations were delivered by Doug in the form of 20 key questions – the questions that every business must ask itself in order to determine its core value proposition and long term sustainability. In our usual day-long events, we would explore all of these questions over a period of eight hours, but since a wealth of information had to be covered, Doug explained a brief overview of the key concepts behind these highly effective so-called ‘thinking tools’.

After the overview, invited to the stage for a joint session with Doug was Carole Anne Rice of The Real Coaching Company. Carole’s company is aimed at entrepreneurs who want a more objective approach to their skills training and personal development. She provides coaching and assistance in areas such as goal setting and motivation, helping entrepreneurs to stay focused and drive ahead with their ideas. Its clear that coaching is a highly competitive field that has recently taken off in the UK, following on from the US where it originated.

Next on Doug’s discussion list was our first Featured Entrepreneur Samantha Kelly, who described her early stage venture aimed at helping juvenile detainees and ex-prisoners with personal development. The distinction between what constitutes a charity and an enterprise arose which highlighted the need for further research into the area, with a specific focus on funding and monitoring the overall efficacy of the new service.

We then welcomed our special guest for the afternoon, Uday Thakker, founder of Red Ochre a consulting company that helps small businesses looking for training and preparation prior to starting social enterprises. Uday highlighted in great depth, the various categories of the social business legal framework as it stands today and mentioned the inherent lack of official legal definition for a social enterprise. Positioning your venture within this framework is critical since it has a direct effect on scalability and the regulatory requirements which may arise.

Julie Devonshire, CEO of Global Ethics Ltd.

After a brief Q&A session with Uday, Julie Devonshire, CEO of Global Ethics Ltd. delivered an immensely powerful presentation on how social enterprise can create real positive change in the developing world. Her flagship product, called One, is a mineral water stocked by major retailers that donates one hundred percent of its profits into creating water pumps in Malawi in the form of children’s playground equipment. A former director of Investors in People, Julie explained how the novel equipment stores water for villagers and how her venture has resulted in providing more than two million African people with clean drinking water. Over the last four years, the company has donated an estimated £3m and it has also branched out into distributing contraception and HIV testing. Julie’s company made an impact with our captivated audience as a truly successful model social enterprise and we are confident that we will be hearing more about her future successes.

The afternoon’s focus fell on our second Featured Entrepreneur, Philippa White, of The International Exchange (T.I.E). Philippa’s company offers people working in the communication sector the opportunity to volunteer their skills in the developing world to enhance their career and gain new life experiences. Doug offered Philippa some great advice on how to leverage her sources of professionals, some of whom are high profile marketing and PR agencies, to gain the necessary resources to help grow the company and make it sustainable.

We then explored the role of the investor in channeling funds into social ventures with the help of Jonathan Jenkins of UnLtd and Anthony Ross of Bridges Ventures. Jonathan explained the various options available to social entrepreneurs for sourcing funding to support their ventures. Anthony explained the details typical investors look for in a prospective company or organisation and answered questions about the typical terms and fund sizes consistent with the industry. Jonathan was asked by our audience how a growing social enterprise sector might affect funds and the economy as a whole. As it happens, we may not see an instant change in the funding approach as funds remain largely tied down by government regulations. There does however seem to be some light at the end of the tunnel since this sector is rapidly changing and we may see some new opportunities open up.

Moving on, we introduced the third Featured Entrepreneur showcase, Tom Rippin, founder of On Purpose who talked about his one year leadership program aimed at placing tomorrows leaders into leadership positions in high profile companies like O2 and Comic Relief, to enhance their careers and learn about the day-to-day running of such organisations. Associates are paid an equivalent of £20k as part of the training programme, however there were some details about the sourcing of funds that required further research.

Darren Taylor, Eco Computers

Next up on the Featured Entrepreneur hot seat was Darren Taylor, founder of Eco Computers who gave a fascinating account about how his company has helped disadvantaged youth by training individuals in computer refurbishment, repair and sales. Additionally, employees who complete twenty hours of work are awarded with a computer which proves a brilliantly effective incentive. Taylor was applauded by our crowd for his achievement in growing a company that was originally denied funding. The computer entrepreneur naturally struck a chord with Doug’s industry background and Doug remarked that the idea ‘was genius’.

After a brief networking break, S4Stv started its live broadcast where several entrepreneurs surgeries began. Doug was rejoined by Anthony to help advise our fledgling entrepreneurs. A live twitter feed enabled viewers from our auditorium and web watchers to post their comments and thoughts on the businesses presented. For more information about the entrepreneurs interviewed please visit the featured entrepreneurs page here. The S4Stv broadcast covering all the surgeries can be viewed here.

Enthusiastic as ever, our growing community of entrepreneurs commented on the thorough, practical advice presented by Doug and our special guests as well as the timely nature of the debates and key questions. This morning we’ve been receiving a constant influx of positive emails and comments on the site about our Growing a Successful Social Enterprise event and we will hopefully be responding shortly to all of them. In the meantime, stay tuned for our next event and if you haven’t done so already, register for our site here to stay up to date and in touch.