We were interested to see a social enterprise pitching on Dragon’s Den recently. It’s always good to see alternative forms of business profiled in the mainstream media. However, it was disappointing to hear Peter Jones dismissing the entrepreneur by saying she was confused as to whether her venture was a business or a social enterprise…. this is a continual challenge for the sector; the misconception that social enterprises aren’t real businesses.
The first rule of social enterprise is that financial sustainability is of utmost importance, as without this, a business will not be able to achieve their social objectives. We don’t agree however that there is a choice to be made between operating a business or a social enterprise; the choice is what you do with the profits a business makes… this is essentially what defines a social enterprise.
It seems the sector is struggling to shake off the notion of a charity type model, reliant on grant funding and donations, even though recent figures show that almost ¼ of UK social enterprises earn more than 75% of their income from trading*. Although some progress has been made in bringing social enterprise to the mainstream, it seems we still have a way to go in achieving complete recognition and understanding of the business model as a credible alternative to capitalist structures.
So, how can we address the misconceptions that surround social enterprise?
The independent accreditation provided by the Social Enterprise Mark and Social Enterprise Gold Mark offer a solution by providing a credible standard, backed up by sector agreed criteria as to what constitutes a social enterprise. Organisations are externally assessed on application and on an annual basis, to ensure they are truly operating as a social enterprise, with the core motivation of using profits and income to create benefits for society and the environment. These Marks provide a visual sign that a business is trading for people and planet; trading being the operative word.
The key is credibility; to be taken seriously by consumers and businesses, social enterprises need to demonstrate they ‘walk the walk’ when it comes to operating as a credible organisation that is committed to creating real social change. The Beyond the Badge campaign aims to raise the profile of independent labels and how they can help consumers (and businesses for that matter) to easily identify businesses that are proven to be doing good.
We clearly still have a journey ahead of us on the path to widespread awareness and understanding, but, by enabling organisations to demonstrate they have a sustainable business model, with the potential to create real social impact, we are doing our bit towards conquering these common misconceptions.