Community and social enterprises have been around for many years, but there is still confusion as to what a social enterprise is. There are many different models including for example:
- Community development trusts
- Community Interest Companies
- Cooperatives and mutual organisations
- Trading charities
A social enterprise is a business model. It has a social purpose and trades [either goods or services] and aims to make a profit. The profit is re-invested in the enterprise’s social purpose.
The definition according to the Department for Trade and Industry [DTI] [now BEIS] 2002 ‘a social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximize profit for shareholders and owners’.
That is the definition would mean a social enterprise must:
- Trade and earn more than 50% of its income
- Re-invested at least 51% of its profit into its social mission
- Lock its assets into its social purpose
Most people will know a social enterprise, but perhaps don’t know it themselves, here are a few examples:
Some Solihull based Social Enterprises are:
Social Enterprise is further explained in these two very useful documents:
- Birmingham and Solihull Social Economy Consortium’s ‘Are you ready for enterprise’ Download Here
- Social Enterprise UK’s guide ‘Start your social enterprise’ here