Social enterprise and entrepreneurship
Visioning a powered-down local economy is one thing, but how do we bring it into reality in such a way that it supports the wider transition of the community and can thrive independent of external funding?
Transition is about creating a new, economically viable local infrastructure that creates livelihoods, skills and resilience. These projects need to be economically viable, and one vehicle for this is social enterprise. This is gaining a lot of traction and interest, often in the context of the government’s ‘Big Society’ agenda.
Understand from an early stage the need for social entrepreneurship. Design and support initiatives, providing training and events, and link with existing entrepreneurship support providers.
Transition is about creating a new, economically viable local infrastructure that creates livelihoods, skills and resilience. These projects need to be economically viable, and one vehicle for this is social enterprise.
This is gaining a lot of traction and interest, often in the context of the government’s ‘Big Society’ agenda. The idea of this ingredient is, firstly, that Transition initiatives might better meet their aims by stimulating and supporting social enterprises and entrepreneurs locally and, secondly, that in the pursuit of initiatives becoming financially viable, social enterprise has a key role to play – possibly through the initiative setting itself up as an enterprise offering services, selling training in its projects, etc., through to getting an ongoing donation or revenue cut from enterprises it has helped support or that have emerged from the initiative’s work.
But what does social enterprise actually mean? The first thing to note is that it is not a new idea. The Cooperative movement in the 1860s created viable businesses to strengthen local economies and create meaningful employment and local ownership. Futurebuilders, who support third sector organisations, define social enterprise as:
Social enterprise is a business or service with primarily social objectives whose surpluses are principally reinvested for that purpose in the community, rather than being driven by the need to maximise profit for shareholders and owners. Futurebuilders[i]
Transition in Action: The REconomy project
by Fiona Ward
The REconomy project aims to help Transition initiatives to engage local businesses and organisations, and stimulate new social enterprises in order to strengthen their local economy and increase community resilience. This is Phase one of what we hope will be an ongoing programme of activity by Transition Training and Consulting – the part of the Transition Network that engages with business and organisations, including social enterprise. This project has been kindly funded by the Roddick Foundation.
The project is working with ten Transition initiatives during 2011 to help them to define, then strengthen, the skills they need to:
- engage their existing local businesses and organisations in discussions about Transition issues, the implications and the potential solutions
- stimulate the start-up of new social enterprises that can take advantage of the low-carbon and relocalised markets, and shape a more sustainable and equitable local economy.
We also aim to pilot a means to estimate the economic potential of a local Transition economy, including its land/energy assets, skills and other resources, and then explore how this can be used to best effect to engage all the relevant players in a coordinated, and prioritised, set of activities to deliver this economic potential.
For more information see www.transitionnetwork.org/projects/reconomy
In essence, social enterprises strive to be financially viable, with explicit social aims and an ownership model that increases social participation. Often they stem from one visionary, bold individual; an entrepreneur. I asked Nick Temple, formerly of the School for Social Entrepreneurs,[ii] what qualities seemed typical. He told me that being a social entrepreneur is as much an attitude as a specific business model. In essence it is about approaching social and environmental problems entrepreneurially. His advice:
- Just get on and do stuff: The best thing is to get started and learn from your own and other people’s experience. Pilot things, measure what happens, don’t wait for permission; just get started on a scale that feels achievable.
- Mission before everything else: Why are you doing this? What is the big idea? Being clear about your purpose enables you to check against it when you are planning how your enterprise will function . . . everything else flows from this.
- Measurement: The whole reason for creating a social enterprise, as opposed to a more conventional business model, is to benefit society. Measuring your influence is vital for funding, investment, credibility and so on. Methods exist for measuring results, so don’t reinvent the wheel.
- The Person is the Organisation: Social entrepreneurs often have a certain ‘something’. They have often got to where they are through being naturally gifted at building trusted relationships and leading by example.
As a result of its Energy Descent Action Plan process,[iii] Transition Town Totnes identified ‘Catalyst Projects’. These are central to the relocalisation of the area. They could be viable social enterprises that could link in interesting ways. As Nick Temple says, “the important point is to not fear business, not all successful businesses are inherently in some way wicked. All of the practices utilised by business aren’t evil, they have evolved over time with good reason.” If an operation doesn’t make money, it loses money, and that has to come from somewhere. Localisation and resilience-building offer great potential for new enterprises.
Transition in Action: From the Ground Up
by Stephanie Hofielen
From the Ground Up (FGU), a working group of Transition Town Kingston, is a volunteer-run, not-for-profit, organic fresh-fruit-and-vegetable box scheme. We operate within the Transition Town Kingston umbrella but are autonomous in the pursuit of our objectives. The scheme was launched in March 2010 as a buying group for eight families in response to the high expense and inaccessibility of organic food. The group was very clear in its goal of sourcing organic fruit and vegetables at affordable prices while supporting sustainable food systems. The principles underpinning FGU are as follows.
- All fresh food is sourced from ethical certified organic suppliers (Soil Association certified in the UK).
- Food is priced at near trade (wholesale) prices, with only a minimal charge to cover FGU costs – not to make a profit.
- FGU provides a marketplace for local producers of organic or natural food products.
- Food miles are minimised by offering food that is seasonal for our geography and ‘local when possible’, with preference given to UK suppliers (other countries we source from are near-European: Spain, France and Italy).
- We work with suppliers that ensure farmers are using sustainable practices and getting a fair price for their product.
- We engender a community spirit by having set locations for meeting, working and collection of orders.
What started as a vision and a shared passion for safe, good food, now boasts:
- Close to 300 names on its mailing list.
- Two active collection venues, offering customers flexibility in pick-up times and location, with more planned for the near future.
- An engaged management team.
- Enthusiastic volunteers who perform a wide range of activities, as well as sorting and packing customer orders.
FGU has recently expanded its offerings to include organic bread from one of London’s few organic bakeries and organic cheese from Somerset. Feedback from our customers has so far been very good.
For more information see www.ttkingston.org/groups-and-projects/ground-up
So how could your Transition initiative foster a culture of localised social enterprise? Firstly, inspire people with good examples of existing social enterprises, arrange visits, and bring in inspiring speakers. Training from local entrepreneurs would provide a worthwhile course, perhaps over a few evenings. The School for Social Entrepreneurs, UnLtd or local organisations with relevant skills would have ideas and experience. There are organisations who offer start-up resource to help catalyst projects become investment ready, such as the National Energy Foundation for energy projects or the Community Builders Programme (see Resources, for all of these). The skills and support are available.
Transition in Action: Growing the Green Valley Grocer, Slaithwaite, West Yorkshire
by Jon Walker
During the spring of 2009, the small greengrocer in the village of Slaithwaite went out of business. We had early warning of this, as Graham (Mitchell) and Helen (Coxan) had an office above the shop, and talked regularly with the owner. The idea began to emerge of the community itself taking over and running the shop, but this would be worth doing only if there was significant support from local people. It had to be their shop, set up with their money, doing what they wanted it to do. Graham set up a website and used email to spread the news. We held a public meeting on 8 May, where it became clear that there was good support for the idea. We got to work, setting up a steering committee, developing a business plan, creating a legal entity (an industrial and provident society cooperative), and getting everything in place to launch a community share issue to raise the capital we needed. We also put together a partnership with another start-up cooperative – The Handmade Bakery – to share the premises and thereby reduce our costs and massively strengthen the retail offer simultaneously.
At the second meeting, on 29 May 29, we launched the cooperative and the share issue. That evening we set a target of raising £15,000 in just ten days, using it as a test of whether the strength of public support was sufficient to make the thing work. If we didn’t reach the target we would call it a day, give people their money back, and go back to the day job. But we did reach the target, and so we agreed to press on.
Work began on the shop, and thanks to some great volunteers, we were ready to open in just ten days. Amazingly, the cost of it all was under £10,000, mainly because everyone worked for free.
The Mayor of Kirklees opened the shop on a beautiful sunny Saturday (see picture). It’s going really well, we’re getting more and more customers and new members, sales are way above our initial expectations, and (amazingly) the local Co-operative store reports that its trade has improved since we’ve been open – despite our success. It looks as if loads of people who used to go elsewhere to shop are now staying in the village as it’s so much more enjoyable. The bakery has been an essential part of this.
We continue to make every effort to source local food: we actively look for and encourage local growers, and buy everything that anyone in the area has to spare, from allotments, gardens, window boxes and pots outside their front door. Last summer we issued the Green Valley Grocer Garlic Challenge: the only garlic on the market came from China . . . so we bought lots of garlic cloves to grow and sold them at cost to our customers. This year we should have mostly local garlic.
Although the shop is an independent business, its birth and development took place in the context of MASTT – Marsden and Slaithwaite Transition Town. Many of us belong to both. MASTT members bought shares and continue to support the shop, and the whole local food programme is being developed by all of us. Recently, another bunch of MASTT people have set up a growing co-op called Edibles, mainly to supply the Green Valley Grocer. Our vision is of clusters of cooperatives all working together for everyone’s mutual benefit and building a more resilient, local food network.
The following organisations can offer support:
Black Training Enterprise Group: www.bteg.co.uk
Carbon Leapfrog: www.carbonleapfrog.org
Community Builders Programme: www.communitybuildersfund.org.uk
Co-operative Enterprise Hub: www.co-operative.coop/enterprisehub
Co-operatives UK: www.uk.coop
Local United can offer excellent case studies of successful social enterprises, and have produced 8 excellent ‘Diffusion Packs’ – nuts-and-bolts guides to setting up a variety of social enterprises, from local energy companies to food hubs: http://tinyurl.com/6yz5v74
National Energy Foundation for energy projects: www.nef.org.uk
Regional Social Enterprise bodies, e.g. Social Enterprise London: www.sel.org.uk
School for Social Entrepreneurs: www.sse.org.uk
Social Enterprise Ambassadors: www.socialenterpriseambassadors.org.uk
Social Enterprise Coalition: www.socialenterprise.org.uk
[iii] Hodgson, J, Hopkins, R. (2010) Transition in Action: Totnes and District 2030: an Energy Descent Plan. Transition Town Totnes/Green Books.