Social Enterprise Accounting...
...services from £64pm
If you've got more on your mind than profit, if you're working to benefit society or the environment, it's possible you're running a Social Enterprise. A Social Enterprise is a little different from other types of business, and generally requires a different kind of vision behind it. You might know all there is to know about your industry, but if your instincts go no deeper than "eat, grow, repeat" then you just don't have what it takes. Move along. Go home. There's nothing to see here.
Social Enterprises can be organised in a variety of ways, running the full spectrum from Sole Trader businesses and Limited Companies through to charities and Community Interest Companies (CICs). A CIC, for example, is a specialised type of Limited Company designed for Social Enterprises. They have clearly defined social objectives and protections so that their assets can't be sold privately. You set up a CIC by applying to Companies House, either working from scratch or converting an already-existing company. There's a small fee either way.
Of course, the fact that you've got priorities other than pure profit doesn't mean you don't still need business sense and a sound plan. Firing every single zombie on Earth into the sun may sound very noble on paper, but have you considered the tax implications and long-term sustainability of your business model? You'll need the right staff of engineers, astrophysicists and humane animal trap designers for a start. You'll also need to fund the venture.
That last point is, as ever, an important one. There aren't many specific funding initiatives for Social Enterprise, which means you'll always be competing with other worthy causes. There are a few options, like the Big Lottery Fund or Community Development Funding Institutions, but you'll need to show them that you can reach your goals and make a difference. Social Enterprises sometimes struggle to win contracts from local authorities, who tend to consider them risky to fund or employ. More than almost any other business type, a Social Enterprise needs to balance its ultimate goals against its ability to survive.
Talk to RIFT Accounting about starting your Social Enterprise. Business can benefit society, and we'll show you how.
There's a lot more to being a Social Enterprise than having good intentions and a sound business strategy. It's perfectly possible to run an ethical business or to be morally responsible in your trading without qualifying. You might be gaining some tax advantages by donating a portion of your profits to charity, you might be taking steps to reduce your environmental impact or carrying a scoop to clean up whenever your business does its business in the gutter. However, none of that in itself is going to classify you as a social Enterprise.
Of course, that's not to say that a Social Enterprise can't be a successful business in its own right. However, even with about 70,000 Social Enterprises operating in the UK, contributing £18.5 billion to the economy and employing close to a million people (many of whom might otherwise be disadvantaged in the labour market), it'd be a mistake to measure their success in purely financial terms. Profits are re-invested toward social or environmental goals, and this is where their real value lies.
Setting up a Social Enterprise isn't as quick as some other types of business, and both running it and calculating its success can actually be more complicated. Your business model must make good sense, and your goals must be realistic and measurable. Before you wade out into those waters, you'll need to be sure your footing is strong enough to avoid being swept away by the realities of the business you're in. Your idea, your resolve and your plan must be tested, and detailed, tailored advice will go a long way toward making your Social Enterprise a success.
We can help you build the world you want to live in.