Starting a social enterprise

Rather than relying purely on donations or grants to deliver their services, a social enterprise works like a business, by selling products or services to generate a profit. It then uses that profit to deliver a positive impact in the community. By using this model, the enterprise is more likely to be self-sustaining, and does not need to be restricted to meeting specific criteria to be eligible for grants.

Managing a 'multiple bottom line' - financial, social, and environmental - can result in unique challenges. However, bringing about positive change to people and communities can be very satisfying.

Social enterprises address a particular social or environmental need, for example:

• training through employment for people who have traditionally found it hard to enter the labour market, like the long-term unemployed, young people, disabled people or ex-offenders
• therapies for wellbeing
• residential training in new skills
• opportunities to experience new sports and activities.

Social enterprises could also respond to and build the increasing consumer demand for sustainable shopping for ethically sourced and locally produced goods. Highlighting the social and/or environmental credentials of your service/product could give you the edge over your competitors.

A written business plan will allow you to formally present your business to potential investors or loan providers.

You may want to investigate traditional finance providers like banks. Other sources of finance specifically for social enterprises include:

• Community Development Finance Institutions (CDFIs) - investment for businesses that operate in disadvantaged communities
• Firstport - funding for entrepreneurs whose businesses will benefit communities
• Social Investment Scotland - offers loans to social enterprises that can make sustainable social impacts

You can also get support from Just Enterprise, a Scottish Government programme offering business support and training for new and growing social enterprises.

Business Gateway offers free help and advice for new businesses. Contact your local office for more details.

As with any business, a written business plan will allow you to identify where you need support from experts and peers in the community.

Social Enterprise Scotland is a membership organisation and representative body for the social enterprise community in Scotland which signposts to various sources of support.

You can also get support from Just Enterprise, a Scottish Government programme offering business support and training for new and growing social enterprises.