Social entrepreneurship has emerged over the past few decades as a way to identify and bring about positive societal change. Before jumping into the definition, let’s take a look at some social entrepreneurship statistics from around the world:
- Australia: estimated 20,000 social enterprises operating across all industry sectors, with 68% are in the services sector, 24% are in retail, and 23% in healthcare.
- The United States: 22% have more than $2 million in revenue, 89% were created since 2006 and 90% focus on solving problems at home.
- The United Kingdom: More likely to be led by women and those from minority ethnic groups (2014). 50% reported a profit, 73% earn more than 75% of their income from trade, and 27% have the public sector as their main source of income (2015).
So, how to pick a Social Entrepreneurship idea?
Thinking of doing some good but not sure how to start? Here are some ideas that you can develop of your own:
Define your passions and areas of interest: are you a consumer advocate who believes in retail sustainability? Or are you driven to reduce youth unemployment? Define what keeps you up at night – something really motivating to proceed.
Identify existing market gaps: sometimes, ideas are not enough. It’s critical that you monitor the market and determine how you can fill the gaps in existing products/services.
Know your strengths: list your strengths and skills that support you achieving the mission. This step helps you to identify what you’ve got, to align your resources with the mission, or to find someone to join your team to make up for your weaknesses.
Determine a business model: social entrepreneurship is different from non-profit entrepreneurship, hence you need to consider the following questions: How to monetize your idea? What is the right business model? Is the cross-compensation model the right one?
Some famous real-life examples: TranSanta (US) – a social-media based gift giving initiative, Young Change Agents (Australia) – provides social enterprise education to the youth, Belu (UK) – a drinks business, and many more. In Australia, there’s a growing number of startups aiming to create social change in society. If you’re keen to some of them, join us in the upcoming Startup & Angel event on Social Entrepreneurship & Impact Investing where three promising young entrepreneurs from Good On You, Alt Saints, and SoCoPreneur will present their business ideas and societal impacts.
Entrepreneurship is not always “rainbows & butterflies”. The challenges lie in adhering to both social goals and financial constraints. In other words, social entrepreneurs must be financially sustainable. The key to this challenge is impact investing – an investment strategy that aims to generate specific beneficial social or environmental effects in addition to financial gains. Impact investing lends a hand to social entrepreneurs struggling to remain dedicated to their mission.
Social impact investments come in different forms
Social impact bond: A financial instrument that pays a return based on achieving agreed social outcomes.
Layered investment: Combines different types of capital in non-traditional ways.
Payment-by-results (PBR) contract: A service provider is paid on the results they achieve. A social benefit bond is a special type of PBR contract.
Outcomes-focused grant: Non-repayable grant funding provided on the basis of measuring outcomes. May also be used as a guarantee.
So, impact investing is a precious need for both entrepreneurs and investors to deliver and support innovative and sustainable solutions to the society.
As this terminology sounds a bit unfamiliar, you might pop up questions in your head: What are the benefits of Impact Investing? How is it different from Social Responsible Investing? How to become an impact investor?
Hold on to your curiosity. All your questions will be handled in a panel discussion on Impact Investing, with the participation of speakers from Birchal, Black Nova Group, and Atlassian Foundation. If you’re keen to learn from and network with other social entrepreneurs, impact investors and mission-driven business leaders, mark your diary now!