Beanbags Bookshelf #2 – How to be a social entrepreneur by Robert Ashton

As a social entrepreneur, you have more to consider and build in to your plan. Some will be dismissive of your social mission. To counter this you need to make it a pivotal aspect of your business plan. In other words, the closer you get to making profit the product of your positive impact on people and planet the better.”

This point, from page 93 of Robert Ashton‘s new book, is one of the most complicated but  important issues to consider when trying to start a social enterprise (or take forward a socially enterprising idea). As I’m about to demonstrate, few social enterprise writers manage to express it as concisely and effectively as Ashton does.

Running a successful small business is difficult enough in itself so, ideally, you don’t want your social enterprise (which initially will be a small business) to be cross-subsidising its socially useful activities from the (initially very limited) profits from its trading activities.

The ultimate ideal is that the socially useful and enterprising aspects of your business crossover directly – the fact that The Big Issue is sold by homeless people and provides them with an income is both the main social reason why the magazine exists and the main reason why people buy the magazine – but if there’s a split between the social and enterprise aspects of what you do you need to find ways of funding both. So, if you run a community cafe that exists primarily to provide training opportunities, you probably need to find a way to get paid for providing training as well as getting paid for cups of tea and coffee.

It’s not a surprise that How to be a social entrepreneur – Make money and change the world is a good book. Ashton is both an experienced writer of business books and a social entrepreneur himself so he’s ideally place to write a business book about being a social entrepreneur.

The 17 chapters are split into five sections: ‘What’ – about what social enterprise is, ‘Who’ – about who you are as a social entrepreneur, the self-explanatory ‘How to Start’ and ‘How to Grow’, and finally ‘How to Share’ – which is mainly about working with other people.

Ashton’s key strength is in encapsulating in bite-sized chunks the ideas and practices that successful social entrepreneurs – or those of us who are at least successful enough to keep going – rely on. One of the best chapters is ‘Selling and the Social Enterprise’ – which is about working out what you’re selling, who you’re selling it to and why they might want it. A lot of the suggestions seem obvious in isolation but it’s very useful to consider all aspects of selling as part of a structured professional process.

Ashton looks at the social enterprise angle on: opening doors, buying motives, and features and benefits. These are big challenges for all businesses but as social entrepreneurs we have the added factor – simultaneously an inspiration and a potential difficulty – of being sure that what we’re doing is socially useful and important.  Ashton reminds us that passion for the social change we hope to deliver doesn’t make it any less important to be clear about why a customer, whether they’re a council commissioner or a private individual, should pay us for our products and services?

It’s fine, in fact it’s not at all unusual, to start a social enterprise with a passion for social change and little or no idea of how you’re going to achieve that social change in practice. That passion might help you to convince people to support you and it will help to drive you on when the money isn’t coming in fast enough and things don’t work out first time but it’s not enough.

Ultimately, to be a successful social entrepreneur you need to develop a practical understanding of what you’re doing and why, and you also need to be able express that other people, particularly people who might give you some money. A book can’t enable you to do that but this one will point you in some of the right directions.

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2 responses to “Beanbags Bookshelf #2 – How to be a social entrepreneur by Robert Ashton

  1. Pingback: Tweets that mention Beanbags Bookshelf #2 – How to be a social entrepreneur by Robert Ashton « Beanbags and Bullsh!t -- Topsy.com

  2. David, Have you read Social Enterprise Typology by Kim Alter? This publication was used as a background in our 2006 strategy paper for Ukraine, where this year we seem to have been joined just this year by the British Council and Respublica in discrete social innovation efforts.

    We offer a slightly different perspective – an approach in which profit making business, which can be recognised as already serving some social purpose, be adapted to invest into addressing social problems.

    “Enterprise is any organizational activity aimed at a specific output or outcome. Once the output or outcome – the primary objective – is clear, an organization operating to fulfill the objective is by definition an enterprise. Business is the most prominent example of enterprise. A business plan, or organizational map, provides a reference regarding how an organizational scheme will operate to produce a specific outcome: provision of products or services in a way to create profit. Profit in turn is measured numerically in terms of monetary gains, the “bottom line.”

    This is the function of classic capitalism, which has proven to be the most powerful economic engine ever devised.

    An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.

    That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise.”

    Perhaps the most surprising find on this kind of approach came last year from the encyclical Caritas in Veritate:

    ‘This is not merely a matter of a “third sector”, but of a broad new composite reality embracing the private and public spheres, one which does not exclude profit, but instead considers it a means for achieving human and social ends. Whether such companies distribute dividends or not, whether their juridical structure corresponds to one or other of the established forms, becomes secondary in relation to their willingness to view profit as a means of achieving the goal of a more humane market and society’

    “Striving to meet the deepest moral needs of the person also has important and beneficial repercussions at the level of economics. The economy needs ethics in order to function correctly — not any ethics whatsoever, but an ethics which is people-centred. .”

    Like

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