How to set up and manage a social enterprise

A social enterprise is defined (by Government) as 'a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners'.

To put more simply, any profit the business makes is reinvested into the business/community.

Visit the GOV.UK website to view more information on social enterprises

There are many different websites available to help you consider what sort of social enterprise you would like to set up.

Visit the Social Enterprise UK website for the guide to setting up a social enterprise

Every social enterprise is there trying to make a difference to a community, to particular individuals and/or the world as a whole. This is measured by what’s referred to as ‘social impact’, which is about the difference that this activity or service has made to people/society, economic or environmental outcomes - things that are not always measured in the same ways that financial value is.

Visit the Social Enterprise UK website for more information on measuring the impact of your social enterprise

A legal structure is the legal business structure that your organisation takes. Your legal structure determines things like the amount of tax you pay, or the type of grants or investment that you may receive.

Many social enterprises start off as by simply trading without a company structure and register with the HMRC as sole trader or self-employed; these are unincorporated companies. But when income and activities start to grow, and if you want to win contracts, apply for funding, get investment, and hire people, you will need a legal structure of some sort.

There are many different legal structures you can use when setting up a social enterprise, it all depends on what you want to do and who will benefit from your enterprise.

When choosing your legal structure for your social enterprise you will need to look at:

• the activities you are going to do
• where your money will likely come from to support your enterprise
• what governance might best suit your enterprise and how much control you might want
• who else needs to be involved?
• who are your potential customers and partners?

To help you to start thinking about legal structures visit the gov.uk website on setting up a social enterprise.

More advice and start-up guides are available if you:

• Visit the Social Enterprise UK website
• Visit the School for Social Entrepreneurs website
• Visit the National Council for Voluntary Organisations website
• Or visit our toolkit on setting up a community group.

Your social mission sets out what your social enterprise aims to achieve. It helps you to make sure you are staying on track when planning your next steps. Your social mission is what makes social enterprises different from mainstream businesses, whose central purpose is to make as much money as possible. It should tell everyone what your business does; how you do it; and why? It is always worth exploring what needs to be in your mission statement from the very beginning as you will be referring back to this on regular occasions and including it in documents such as your business plan, your governing document, branding, marketing and advertising etc.

Visit the Wix Blog website for more advice on how to develop a mission statement

There are several reasons why you should write a business plan:

• it provides a structured way of organising your thoughts and clarifying your ideas
• it helps you set out your goals and spot any potential problems in achieving these
• it gives you a clear strategy to follow especially when things get busy
• it is often essential for securing external finance for your business (such as grants or start-up-loans)
• it allows you to measure your progress as your business/enterprise develops
• it ensures all of your team are working towards the same vision
• most importantly it helps you plan for the future.

More help and business plan templates can be found by: 

• visiting the Prince's Trust website for top tips on writing a business plan
• visiting the inmind blog to see how to write a business plan for an early-stage startup
• visiting the Start Up Donut website to view their essential guide to writing a business plan.

There are a range of different funding bodies and organisations that offer grants and funding to social enterprises. For more information:

• visit the Lloyds Bank Social Entrepreneurs Start Up Programme 
• visit the Awards programme from UnLtd
• visit The Marches Growth Hub website
• view information on funding and grants for community groups.

To get your social enterprise off the ground you will need to identify who needs to know about it and how you will tell them. You will also need to think about the key messages that people need to know. This can help you to find people who may want to be involved and also use your business or product.

• Visit the know how website for information from NCVO on putting together a communications strategy.
• Visit The Marches Growth Hub website for more information on communications, marketing and engagement.

• View information on small business rate relief that is available to reduce business rates bills in Telford and Wrekin.
• Visit the Social Heart CIC website for more information on business consultancy, coaching, learning development and digital social media strategy implementation.
• Visit the Power to Change website for more information on how they develop and support community businesses.
• Visit the i-se website for more information on growing the social economy.
• Visit the Telford and Wrekin CVS website for support and collaboration with communities in Telford and Wrekin and Shropshire.
• Visit Shropshire Youth Support Trust if you are aged 16-30yrs not in employment education or training and looking for support