Business Enterprise 101
Business responsibility and accountability is on the rise - and with this, is social enterprise.
Deloitte’s 2018 Human Capital Trends report states “Organizations are no longer assessed based only on traditional metrics such as financial performance… Rather, organizations today are increasingly judged on … their impact on society at large—transforming them from business enterprises into social enterprises”. But what exactly is social enterprise?
A social enterprise is an organisation that applies commercial strategies to achieve social and environmental objectives - which in essence means they function as a real business (opposed to a charity) but use their business activities for societal good. To do this, they often take the profits achieved in their commercial activities and reinvest or donate them.
Some key characteristics of all social enterprises are:
They sell goods or services - as a typical business would
They have social/environmental aims and objectives
They don’t rely on donations to survive - i.e. they are not charities
The best way to bring social enterprise to life is by taking a look at some examples:
Cafedirect is the UK's largest Fairtrade hot drinks company and donates up to 50% of its profits to a charity called ‘Producers Direct’. This charity is ‘owned and led by smallholder farmers and is centred on smallholders taking leadership and developing innovative solutions to the challenges they face and provide an opportunity for smallholders to transform their farms into sustainable businesses’.
TOMS Shoes is a popular shoe company which has a ‘Shoes for Shoes’ initiative which means with every pair of shoes you buy, they will donate a pair of shoes to a child in need - so far TOMS has given over 50 million pairs of new shoes to children in need.
FreeFlow is a project within Enactus Sheffield’s portfolio and its key objective is to tackle period poverty. It does this by selling reusable and sustainable sanitary pads in the UK and using the profits to donate these sanitary pads to disadvantaged girls in India.
OneDrop is another project within Enactus Sheffield’s portfolio and its key aims are to support farmers in mitigating crop devastation due to extreme weather conditions, provide education surrounding the overuse of fertilize, provide information on excessive tillage leading to soil erosion, and advise them on new farming techniques. It achieves this by selling affordable, eco-friendly gardening boxes, in a sub project called OneBox, and all profits from OneBox fund the production of the handbook and educational resources.
Enactus Sheffield is always looking for new ideas to provide students with entrepreneurial skills while making a difference in the world. If you have an idea for a new social enterprise project that you are passionate about, please contact me at etaylor@enactussheffield.org.