Social Enterprise should have ONE Focus

To have a better chance of success, social enterprises should aim to tackle no more than one social problem, according to Doug Richard, founder of the School for Start-ups. Speaking at the ‘Shine Unconference for Social Entrepreneurs’ in May, he argued that social enterprises need to be operated as sustainable businesses rather than charities and recruit committed employees rather than volunteers. He warned that enterprises trying to tackle more than one social goal will fail.

The former TV Dragon used award winning social enterprise One as an example of an organisation with one vision – to make money for water and sanitation projects in Africa.
Richard said it raised the question, ‘How good do you have to be to be a social enterprise?’

He used the example of the sale of bottled water. Suggesting that a business selling bottled water creates the impression that tap water is bad for you in order to persuade people to buy bottled water instead. The bottled water is sold in plastic bottles and shipped it from A to B at a huge cost – creating an unnecessary carbon footprint. However the social enterprise is aware that every morning, someone goes into a shop and buys a bottle of water and it wants that bottle to be a ‘One’ bottle, where £1 goes to clean water projects essentially making the best of a bad situation.

He said: ‘If you try and meet every ethical obligation, you will make a loss. There would be no money in your coffers to do the good you intended to do.’

It was a stark warning and bleak introduction to the audience of the event in London, mostly made up of young people looking to start their first social enterprise. They were told that running a business or charity was hard enough, but running a social enterprise is harder still.

Mr. Richard commented that regardless of ethics and good intentions the social enterprise that try to solve every problem will more often than not fail, whereas the enterprise who focus on solving one problem alone will achieve success.

He also suggested that starting a social enterprise from scratch was more effective than waiting for external grants and loans to enable start up.

He stressed that using volunteers to run a social enterprise hindered the process as unpaid labour could not be classed as a job but a hobby.
He said:

‘Volunteers do what they do. You cannot insist they deliver,’ he said.
‘If you want that surplus [of profit], you need efficiency, so stop those volunteers and hire people. Volunteering in enterprise is bad.’

‘The UK needs sustainable businesses solving social problems. ‘When I started School for Startups, it lost money, but I’m rich so I just put more in. Not everyone can do that, which is why you need to be sustainable. This is why now is the time for social enterprise.’

For more information on Social Enterprise visit www.socialenterprise.com