Managing social enterprise

Individual Assignment
1. What are the factors in deriving an effective strategy and revenue model that
keeps a social enterprise sustainable while achieving its social cause?

Social enterprises are a big category of companies and this means that there are
many types of social enterprises. The definition of a social enterprise is a
business with primarily social objectives whose surpluses are principally
reinvested for that purpose in the community, rather than being driven by the
need to maximize profit for shareholders and owners (startups.co.uk) .
I think that the main aim for social enterprises is to be able to make money then
which it can channel into helping a social cause. For a social enterprise to be able
to help out the social cause, it has to be able to generate profits. As quoted from
Liam Black, the former director of The Fifteen Foundation founded by TV chef
Jamie Oliver, he said part of the reason he gave up working with charities was
that more time was spent raising money than getting things done. I believe that
there is some truth to this as charities rely on donations and getting people to
donate. Social enterprise on the other hand is run like a business and works like
a normal business, except that it is giving back to society.
One of the big challenges that social enterprises face is having a double bottom
line. Unlike a regular business who only has one bottom line which is their
financial profit, social enterprises also have another benchmark which is their
social impact or for some businesses may have a triple bottom line which is
financial profit, social impact and the environment. Having these extra bottom
lines means that for a social enterprise they have to be able to not just survive
but to earn a decent profit so they can contribute back to society.

A good example is Ben and Jerrys who took social businesses to a new level with
their social missions and goals. The company has a 3 part mission statement,
which is to make the worlds best ice cream, to pursue progressive social change
and to provide fair compensation to employees and shareholders alike. In 1991,
Ben & Jerrys was probably the first publicly traded American company to offer
health and other benefits to same-sex partners of employees. It was also the first
American company to produce a transparent audit of the impacts it had on
society, positive and negative. It took unusually aggressive steps to limit its
environmental impact, and it set a level of charitable giving that was four times
higher than the average for US corporations. (Edmonson , 2014) .
With such ambitious social objectives, Ben and Jerrys is able to stay committed
to its social objectives because it has grown into a multinational company and is
reaping enough financial profits to invest in these social causes.
However for a lot of social enterprises nowadays such as cafes, retail outlets and
others, they face the challenge of being a small business. And because they are
small they cannot create a meaningful number of job opportunities and cover the
costs with employing an unskilled and disadvantaged workforce with little ability
to grow business revenues, these social ventures cannot reach a level of scale
that provides sufficient revenue to cover these additional social costs.(Schorr,
2006)
This problem is quite relevant to social enterprises in Singapore today. Many
social enterprises today are small businesses. While many of these businesses
are small, they also have to cope with hiring a disadvantaged workforce or they
have to give up their profits to a social cause.
I think that one of the best models for social enterprises is the work integration
model. The definition of a work integration model is a business that hires a

disadvantaged community or marginalized community into its workforce. Some

examples of work integration social enterprise in Singapore are: Dialogue in the
Dark, Bettr Barista , 18 chefs.
The work integration model is very popular among social enterprises in
Singapore as it benefits the beneficiaries directly, by giving them a job and
training them in work related skills. The beneficiaries become involved in the
business and are instrumental to its success. The social impact for this model of
business is great as it impacts the lives of the beneficiaries. However there is
also great risks in taking this model. As the business has to train its new
employees who may be disabled or disadvantaged, there are some challenges
involved. For example, while working at Dialogue in the Dark I got to experience
how they train their visually handicapped employees. There were some
challenges that they faced such as having to rely on sounds when moving
around.
Other social enterprises may also face challenges when training its workforce.
Another example is 18chefs, who hire ex-convicts. They faced challenges as
some of the employees did not come to work or tried to steal money from the
company. While there are challenges in hiring a disadvantaged community, it is
also rewarding and benefits the beneficiaries a lot.
The second model of social enterprise is the plough back profit model. The
plough back profit model is a business that aims to generate profit to fund the
social programmes of their affiliated or parent charities. This is another good
model for social enterprise as they are using their profits for a social cause. One
example of plough back profit model is the restaurant food for thought, which
gives back some of its profits towards helping the underprivileged students in
the Philippines. This model for social enterprise works well as there is little risks

involved when starting the business compared to work integration model. The
business is able to run smoothly and without many hiccups.
However one con of this type of social enterprise is that the social impact is not
as big compared to the work integration model. Many people may doubt whether
the business is genuinely helping a social cause or is just trying to boost its
image. As the business has to donate some of its profits back to helping a social
cause some people may question if it is really helping. For example if a business
is doing very well and making a lot of profit however it is donating a small
percent of its profit to helping a social cause it may not look like so genuine. This
model of social enterprise is great and easy to sustain.
Lastly the third type of social enterprise is the subsidized services model. This
model of social enterprise aims to provide subsidized services to needy and
disadvantaged. One example of this model is the social enterprise tuition giving
which aims to provide underprivileged children with access to tuition at
subsidized rates.
This model works well as the social impact is great. It directly helps the
disadvantaged communities by providing them with cheaper and more affordable
services. However the con is that it does not make so much financial profit due to
providing these subsidized services. Therefore these businesses are usually run
by the government.
To have a sustainable social enterprise there is many factors involved, such as
being profitable, having a good social mission and having a good product.
I think one of the most important is to have a good product. If the product isnt
attractive to the public, it will be hard for the public to support the business. For
example, common social enterprises in Singapore are restaurants or cafes.
Restaurants and cafes are easy to set up and can make good profits if business is

good. However the restaurant and caf scene in Singapore is very competitive
and there are many other competitors out there. For a social enterprise
restaurant they have to make their product more attractive to stand out from the
rest. A good example is the restaurant 18 chefs which makes its meals more
attractive by pricing it cheaper and offering value meals.
Having a good social mission is also important to making a sustainable social
enterprise. However I think that the social mission is less important than the
product. Having a social mission will help to promote your business and attract
more customers, however it needs to have a good product to be successful.
Some of the reasons that social enterprises do not survive for much longer are
because Social enterprises face similar business challenges as most small
medium enterprises. These include financing, manpower, marketing, product
quality etc. The key success factor for any social enterprise lies in the successful
balance of both social and financial bottom lines. Like any regular businesses in
the market, social enterprises must possess quality products and competitive
services, as well as a viable business model to market their products.
(MSF.gov.sg)
Therefore a good social enterprise should focus on having a good product and
making sure they have enough manpower and marketing. A good social
enterprise should be able to juggle its social mission and financial profits.

References
Social enterprises media queries. (2011, October 28). Retrieved from
http://app.msf.gov.sg/Press-Room/Social-enterprises-media-queries

Retrieved from http://www.concern.sg/SocialEnterprise

Edmondson, B. (n.d.). Ice Cream Social: The Struggle for the Soul of Ben &
Jerrys. Retrieved from http://www.greenmoneyjournal.com/march-2014/icecream/

Gelles, D. (2015, August 21). How the social mission of Ben and Jerry's survived
being gobbled up. Retrieved from
http://www.nytimes.com/2015/08/23/business/how-ben-jerrys-social-missionsurvived-being-gobbled-up.html?_r=2

Retrieved from http://www.ethicsworld.org/corporatesocialresponsibility/PDF

%20links/socialenterprise.pdf
Social enterprise revenue models. (2015, August 27). Retrieved from
http://startups.co.uk/social-enterprise-revenue-models/