Image, they say, is everything. To help create the right image to their customers, businesses employ a range of “buzz words” to assist in communicating to the right audience. Depending on your business, and more importantly, your audience, a business will use different words. ‘Social Enterprise’, ‘Ethical Corporation’, ‘Integrated Business’… The list goes on.
But what the hell do these terms actually mean? This is the first in a series of articles called “Yeah, but what does it mean?”.
These articles will help to shed light onto the meaning and correct usage of some common business branding terms.
Social Enterprise. Sounds fancy doesn’t it? Cleverly invoking feelings of a large successful business and a community-facing local business at the same time. This term has become a popular branding choice as of late, but what exactly does it mean?
A Social Enterprise can be identified as having the following components:
Clearly Defined Social Purpose and Benefit
A Social Enterprise, at its core, is about helping people. To that end, Social Enterprises begin with a clearly defined purpose and societal benefit which will come from their work. They might donate a percentage of their profits to a specific charity which will help achieve their benefit.
Income Comes from Business Activities
Unlike traditional not-for-profit organisations, which may generate a majority of their revenues from donations or government grants, Social Enterprises generate income through commercial activities. It is this difference that really makes social enterprises stand out from other forms of business; they look and operate exactly like a private for-profit business, but aim to serve a higher purpose.
Reinvesting Profits
To serve this higher purpose, a Social Enterprise will reinvest the majority (at least 50%) of its profit back into initiatives that help achieve its defined social purpose and benefit. This is the crux of the Social Enterprise; investing commercial profits to achieve social benefit. It is important to note that the Social Enterprise does not have to work directly with the end beneficiaries of their cause. A Social Enterprise may work in tandem with other businesses, or invest in research and development; work that ultimately assists in providing benefit to others.
Social Enterprises are becoming more common as they combine the benefits of for-profit commercial activity with wider benefits for other groups. When starting a new venture, consider the elements of this type of business, as it may serve you well.
